NATIONAL FEDERATION of INSURANCE FIELD WORKERS of INDIA XXV FEDERAL COUNCIL MEETING, 23 and 24 January 2012

NATIONAL FEDERATION OF INSURANCE FIELD WORKERS OF INDIA XXV FEDERAL COUNCIL MEETING, 23rd and 24th January 2012 COM. S.W.KALVIT NAGAR, TARGHAR GROUND, MALL ROAD, AGRA CANTONMENT, AGRA

Respected President, H’nble Guests, Beloved Veteran leaders, Members of the National Executive committee, Delegates and Observers,

On behalf of our mighty organization NFIFWI, it gives me immense pleasure to extend a warm welcome to all of you to this XXV Federal Council Meeting being held at AGRA. I am extremely happy to see this mammoth gathering which has descended on AGRA to attend this Federal Council Conference. My salutes to each one of you for the spirit and enthusiasm shown. We thank the entire team of Agra division under the leadership of Com. Ashwini Sharma and Com. Sanjeev Kumar Sharma and North Central Zone under the leadership of Com. D.R.S.Raghav, Com. Vivek Singh and Com Manish Kumar with guidance of our All India Vice President Com. K.P.Singh for shouldering the enormous responsibility of hosting this great event. Our National Federation is 55 years old and growing stronger. We all are remaining protected only because of National Federation. Being united and remaining Under one Banner of NFIFWI and together fighting for our cause, we have earned a status in LIC and society, security and prosperity. Our brotherhood, comradeship, unity contributes to a well knit organization. We are all proud members of this great organization and it is a matter of great honour to belong to this mighty NFIFWI. We pay our respects to Com. S.W.Kalwit saheb and all our veteran leaders and members who have sacrificed their lives to make our days better. Our warm revolutionary greetings to the members, veteran leaders, their families and all associated with NFIFWI on this occasion. Kindly rise for raising slogans.

Homage to our dear and respected persons

We pay our respectful homage to all personalities from various walks of life who laid down their lives in the midst of their contribution to the welfare of our society and nation and who lost their life in the process of their revolutionary struggles to defend democracy and humanity. We pray for the innocent victims of terrorism and their families. Our respectful homage to leading personalities Shri. Bhairon Singh Shekhawat, Former Vice President, Shri.K. Karunakaran, former Chief Minister of Kerala, Shri. Dorjee Khandu, Chief Minister of Arunachal Pradesh, Shri. Sathya Sai Baba, Spiritual Guru and Philanthropist, Trade Union Leader Com. M.K.Panthe, Farmer leader Shri. Mahendra singh Tikait, Apple founder Steve Jobs, Hindustani Classical Singer Shri. Bhimsen Joshi, Renowned Singer Shri. Bhupen Hazarika, Ghazal Singer Shri. Jagjit Singh, Actors Ms.Elizabeth Taylor, Shri. Dev Anand, Shri. Shammi Kapoor, Writers Ms. Indira Goswami, Shri. Kakkanadan, World renowned Artist Shri. M.F.Hussain, Scientists Shri. Har Gobind Khurana, Shri. P.K.Iyengar, Bureaucrat Dr. P.C.Alexander, Cricketer Shri.Tiger Pataudi, Brazilian Footballer Socrates and Cartoonist Shri. Mario Miranda who dedicated their life to the cause of the downtrodden and served the country in various capacities. We 7 were shocked by the terrorist attack in which we have lost many of our comrades. We place on record our salute to the brave commandos and security forces who sacrificed their lives to protect our country and all who bravely fought the terrorists. Natural calamities have taken a toll in many parts of our country. The cyclonic storm “THANE” has devastated the coastal towns of Puducherry, Cuddalore coming under Vellore division. The economy has suffered a big setback which will adversely affect the insurance business in this area.

National Federation lost many members, our dear ones and veteran leaders, Com. M.Aravindakshan (former SZ President), Com. Uma Shankar Singh (former NCZ President), Com. M.P.Reddy former President of the combined Chennai I & II divisions, Com. Charles Stephen (former President of Vellore division), Com. M.L.Shroff (former Secretary of Raichur division) all who sacrificed their lives to build this organization and was a constant source of guidance and inspiration. It is a great loss for National Federation. Familiar and smiling face of former NEC member Com. Mukund Marathe, President of Mumbai Division I is no more with us as tragedy struck him at a very early age. On 22 nd July 2010, three of our comrades from Contai Branch, Kharagpur Division, EZ lost their lives in a tragic road accident. I request this august house to rise and observe two minutes silence as a mark of our respect to the departed souls.

Introduction

In this report we are placing before you the working of the organization for the last two years and making an attempt to throw light on various information, analysis, strategies, struggles, negotiations, demands, settlements, solutions relating to the tasks before us, organizational working, threats etc. We are meeting in this bitter cold environment of Agra and in a very challenging situation that is confronting the cadre of Development Officers, LIC and the Insurance sector as a whole. We are extremely happy to see this mammoth gathering of around 4500 members attending this Federal Council Meeting. This reflects the enthusiasm, commitment and faith of the members in our mighty organization National Federation of Insurance Field Workers of India. This time too members have responded well in time to register and support the hosts. In the last two years many Development Officers have retired. Our All India Vice President Com. K.P.Singh and Resident Secretary-Hyderabad Com. V.B.Mohan, ECZ Secretary Com. N.K.Ganguly, CZ Secretary Com. I.S.Bharathi, NEC members Com. V.K.Mehra, Divisional President of Ajmer division and former ZS of NZ, has retired from the services of LIC. We wish them a very happy, healthy and peaceful retired life. We have new and young blood in our organization, the PDOs and newly confirmed Development Officers who are the future of LIC and NFIFWI. We give them a hearty welcome.

The Development Officers all across the country and Management are watching this conference and anxiously waiting for the decisions and future directions evolving from here. We as a working class have specific issues and social concerns which impacts our life and work. As a

8 Development Officer we have to be aware and sensitive to the situation around us in the Industry, nationally and globally. This is necessitated by the fact that global and national economic policies have a direct impact and bearing on the Insurance Industry which will be reflected on LIC and its workforce. The Development Officers of LIC of India are governed by the policies of the Government which is translated into laws and rules by the Finance Ministry, Department of Financial services, CBDT, IRDA and LIC of India. LIC being a public sector organization, the impact of the various policies through new laws and rules causes impact on the working and employment conditions of Development Officers. The changes are necessitated due to the circumstances, but many a time the circumstances are designed to force unwanted changes harmful to all segments. The private companies who operate for profits alone is the key factor who lobby and manipulate policies to enhance their profits and pursue their interests. These manipulations are also to overcome the competition by pulling down PSUs and Government organizations. The various scams that has been exposed is a consequence of the privatization and liberalization policy.

Today it has become clearer that the liberalization policy has forced the Government of India to privatize the insurance sector. After the privatization of insurance sector the private insurance companies together started pressurizing the Government to create a “level playing ground” by removing the sovereign guarantee of LIC of India, increasing the capital to Rs.100 crores, to dilute the government stake and control in LIC of India, to reduce the bonus of LIC policies, to give up the power to frame rules for Agents (Agents Regulation 1972), to allow increased FDI ultimately leading to 100% FDI etc. These pressures and lobbying have made the Government to initiate the amendment of Insurance Act 1938, IRDA Act and pave the path for weakening LIC. The entry of private companies after privatization saw the emerging focus on ULIPs. LIC too blindly pursued their path. The focus on ULIPs saw the arrogance of the management in side lining the Development Officers and initiatives to reduce dependence on Development Officers by promoting parallel and alternative marketing channels. The privatization has also resulted into manipulatively induced changes in work conditions for Development Officers and Agents.

NFIFWI had analysed the whole situation and decided that we need to fight the root cause of the problems facing the class of Development Officers rather than fighting the problems at the surface which is nothing but Tip of the Iceberg. Our strategies and struggles have been in this line and our strategies are based on the need of the cadre as a whole and the market scenario. Our stand was that we shall not compromise on principles governing any issue and that we shall pursue the issues to achieve solutions keeping the principle intact to the best levels. We have followed the path of Representation and Negotiation on all matters. The struggle of Parliament March and Yogakshema March was necessitated because of the need to resist various offensive of the Government, IRDA and management. The non settlement of GOIB scheme, unilateral decision to impose work norm conditions with 17% cost, decision to introduce Chief Life Insurance advisor, etc were the offensives by the management to change our work conditions intended to demotivate us on one side, change 9 the work system of D.Os, change the marketing system with reduced dependence on Development Officers and reduce the cost of maintaining the Development Officers marketing channel.

Our focus of representation and struggles has been to Save, Protect and ensure Growth and 90% market share of LIC, Protect the role of Development Officer and establish the need of marketing official called “Development Officer” for the growth and development of LIC of India, Protect the Development Officer cadre, Recover the snatched away benefits of Development Officers, Improve the work conditions of Development Officers, Ensure Job security, Securing Good salary and Pension benefits for D.Os, Protect the Agents and Protect the Policyholders interests. To achieve these goals, strategically, we have taken up all issues in the beginning stages it self to ensure our best efforts to block harmful policies. There was a feeling induced by the management that we should not approach the Government or Parliament for our issues. This had created rumours and divided opinion. This also proved to be costly in the case of the MAB for agents and losing opportunity for a long time to pursue our issues with the Government. We decided to pursue only with the management and after two years management out rightly rejected our request for dilution of MAB conditions. When justice is denied or delayed it results into untold suffering and disadvantageous position. Hence, we are very clear that if solutions are not forth coming from the management within a reasonable time frame, then we have no option but to represent our issues before the Government and Parliament. The National executive at Amritsar finally decided to submit memorandum on various issues with regard to Management, IRDA and Government and pursue it.

The struggles of National Federation against the various issues has brought out solutions on LIC of India Act Amendment bill. The Parliamentary Standing Committee on Finance headed by Shri.Murali Manohar Joshiji gave a favourable report supporting the movement against the Bill. The sovereign guarantee is retained and the capital will be raised to Rs.100 crores funded by the Government. This removes the threat posed for future disinvestment as of now. These solutions have helped protect LIC to a great extent. The Insurance Laws Amendment Bill was examined by the Parliamentary Standing Committee on Finance headed by Shri.Yashwant Sinhaji. The report has been tabled in the Parliament. The committee has rejected the proposal to allow FDI hike from 26% to 49%. The other aspects of the bill have been favourably considered by the committee which we will deliberate later. The entire efforts and struggles by NFIFWI has been brought out clearly in the document circulated to all members which we will deliberate later in the report. Pursuing our memorandum during the Parliament march, we had deposed before the committee and submitted written replies. Continuous follow up of our Memorandums and mobilizing Members of Parliament to support our cause and logic was done. These efforts continue and has to continue systematically to ensure achievement of our goals and agenda. The dangerous Swarup committee report having far reaching consequences has not been taken forward and is on hold as of now. However we need to be cautious and vigilant as the Swarup committee recommendations are meant to help the government

10 achieve the ultimate goal of life insurance being purchased in India with financial literacy and without the need of an intermediary

The IRDA has been bringing about lot of changes. Some of the changes have created lot of difficulties for the Development Officers and is targeting the agents of LIC. The compulsory online exams, the persistency norms, new syllabus and examination system have created hurdles in recruitment and retention of agents. The IRDA has initiated a thought of allowing one agent to work for 2 insurance companies and started the debate on Senior agency system. These initiatives are dangerous in the long run and not in the interest of LIC, its policyholders or Development Officers. We have been pursuing the issues vigorously and now through the campaign of submitting memorandum to MPs and Government. ULIPs too was encouraged by IRDA but after the war between SEBI and IRDA, the norms for ULIPs has been tightened. The misselling of ULIPs has resulted in loss of trust of people and the downfall of ULIPs has resulted in the harsh reaction of the policyholders. This has lead to a situation where the agents are shying away from the market afraid of facing angry policyholders.

The fallout of the economic recession in USA and Europe has made the political parties to rethink their policy and oppose blind liberalization and privatisation. “We are unions, students, teachers, veterans, first responders, families, the unemployed and underemployed. We are all races, sexes and creeds. We are the majority. We are the 99 percent. And we will no longer be silent. As members of the 99 percent, we occupy Wall Street as a symbolic gesture of our discontent with the current economic and political climate and as an example of a better world to come. Therefore we invite the public, our fellow 99 percent, to join us...” This was the statement of the movement of the Occupy Wall Street. Therefore today the situation is different and undergone a slight change with the change in thinking amongst various political parties. This has resulted in the economic policies of Government being opposed successfully: The decision for FDI in retail sector was withdrawn. This was after the decision of the central UPA government to permit 51% foreign investment in retail sector and 100% in a single brand was received with wide spread protests throughout the country, even within the UPA allies. This also helped us build up opposition to the various amendments in the LIC of India Act and Insurance Laws Amendment Bill. In order to face the economic crisis which is of their own making, neo-liberal regimes are hatching conspiracies in several ways to bleed the workers. Pension privatisation and the privatisation of banks and other public sector institutions are parts of this conspiracy. The Pension Fund Regulatory and Development Authority (PFRDA) Bill has been proposed. The PFRDA bill has been kept in abeyance due to objections from allies and opposition parties.

In LIC, the situation confronting the Development Officers is definitely far better than the harsh and enimical situation which was prevailing in the post GOIB 2004 Period. Today the management has declared their slogan of “Back to Basics”. Recently our Current in Charge has stated 11 in an interview to ET that LIC is shifting away from ULIPs and that the focus is on conventional business which is healthy for an insurance company. The ratio of conventional business to ULIPs is 70:30. The misselling of ULIPs and losses incurred by policyholders has created havoc in the Industry and pushed people towards conventional policies. All these developments has vindicated the stand of NFIFWI against ULIPs and proved that NFIFWI was on right track in opposing ULIPs. We continue to maintain that ULIPs are not good for the people of our country, industry and LIC. The concept of Graded credit has been opposed and now the management has agreed that we will remove the Graded credit in a phased manner. Our fight amidst mixed attitudes of optimism and pessimism has given success to bring down the Graded credit level of 100/80/70. The circular on Allotment of agents is a major achievement which also helped us to establish the logic stated to resist the concept of graded credit. The historic wage revision clinched by National Federation has put our Development Officers in a comfortable position ensuring a secured and comfortable pension too. This is because salary is always steady and permanent in nature. The principle fight of removing PLLI from cost is won and payment of medical benefit of Rs.5000 without bills and without cost and tax has been achieved. Our FCA is also increasing with a maximum of approx Rs.15000 starting from Rs.3600 at the minimum level for D.Os with four wheelers. The credit for mail order business and opening up of divisional area for D.Os are our major break throughs. We have unfinished agendas for which we are seeking solutions and some of the issues need improved solutions. Our struggle and pursuation continues for the same. To achieve these ends we need to strengthen our organization. The purpose of our organization is for collective bargaining and for securing the cadre. Every issue is examined in totality and hence our objections on various vital aspects for SBA scheme, CCA scheme.

We are sure that we will witness constructive deliberations on all issues having a bearing on our cadre, LIC and insurance industry. Our fight against injustice and anti working class policies has to continue and we are very clear that campaigns and struggles are the necessary weapons of our trade union to fight various challenges. Strategies and tactics are to be evolved and we have to keep pace with the speed with which the Management, IRDA and Government is moving. We are confident that this Federal Council will contribute to the might of our National Federation and take decisions to protect the interests of our cadre and LIC and decide the direction and vision of our organization for the future.

International Scenario:

Revolution for a democratic rule was witnessed in the Arab world. People in the Arab countries – Tunisia, Egypt, Yemen, Jordan, Algeria, Libya and now Bahrain, Morocco and even Saudi Arabia have come out protesting against their rulers. While some of the protests were successful to an extent, the rulers have ceded power, other countries are still in ferment. A distinguishing feature in many of these protests is the massive participation of the youth and students.

Three broad characteristics stand out significantly in the Middle East protests. They voice: 12 (i) the democratic aspirations of the people (ii) their economic grievances and (iii) their anti-imperialist feelings.

The world witnessed the continuing global financial crisis. Europe and USA have been facing severe economic crisis. Even the Gulf economy melted in the wake of global economic crisis. The advocates of blind capitalism and globalization theory started advocating for job security and against outsourcing. The issue of Global warming has been on the media headlines demanding for drastic steps to protect against climate change. Today the Recession and Global warming has made the people all over the world uncomfortable.

Major Events in 2010 and 2011

1. Japanese Tsunami has devastated Japan on March 11 th , 2011. The people of Japan and the country continue to reel under the threat of Tsunami and fresh earth quakes striking Japan. 2. The Japanese Tsunami had damaged the Nuclear reactors and caused nuclear leakages causing hazards to people. This has created panic across the world and people opposing nuclear plants. Germany decided to close down all nuclear reactors. In India the people have been opposing Kudankulam Nuclear plant in Tamil Nadu. 3. A nationwide campaign in support of Manipuri civil rights activist Irom Sharmila on a fast for past 11 years seeking repeal of the Armed Forces (Special Powers) Act is launched on Oct 2nd , 2011. 4. On Sept 18 th , 2011 an earthquake, with its epicenter in Sikkim, rocks the north east, leaving 60 persons dead and 100 injured 5. Twenty six persons were killed and 141 injured after three blasts rock crowded areas of Mumbai on July 13 th , 2011. 6. India wins the ICC World Cup by beating Sri Lanka at Mumbai on April 2 nd , 2011. 7. India’s population jumps to 1.21 billion as per the provisional datas of census 2011. 8. On 30 th Dec, 2011 cyclonic storm “THANE” causes heavy damages in Puducherry and coastal district of Cuddalore.

National Scenario:

Our country is going strong and has withstood the impacts of Global recession very comfortably, thanks to the strong Public Sector undertakings. Even then this time the impact is felt in various sectors which were doing business in Europe and Gulf regions. The growth has slowed down, stock markets have been affected, real estate hit and inflation reached the double digits. Even the insurance industry is reflecting a negative growth of - 20% in FPI up to October 2011. We definitely need to change our direction to focus more on the basics. The green revolution ensured food security but globalisation and privatization leading to materialism has brought back food shortage and price 13 rise. The globalisation and privatization leading to disinvestment has also contributed to the opportunity for large scale corruption like the 2G Spectrum scam., the issue of Commonwealth Games scam etc. The UPA government has been facing protests for a strong Lok Pal Bill spear headed by Shri.Anna Hazare. The anti corruption forces also had to face setbacks when there was a poor response recently at Mumbai. Whatever be the merits and demerits of the issues we need to fight for a corruption free society and discourage manipulative practices to ensure a hazzle free living for everybody. The RTI is a boon to check unfair practices. The Government has also projected fairness where many top politicians, businessmen and bureaucrats have been arrested. The scams have not spared LIC too. LIC HFL scam has created dent on the image of LIC. The media coverage of the arrest of top officials and enquiry being conducted by CBI has caused lot of damage and issues for the marketing force. As a consequence the Chairman has been posted as MD and the Government has not yet appointed a Chairman. The uncertainities and defaming media coverages has to be stopped. All these factors has definitely affected the renewal premiums and thereby affecting the marketing force and LIC. The lapsation of ULIPs has been huge due to the crumbling NAVs and stock markets. This situation of the stock markets and ULIPs vindicate the stand of NFIFWI against ULIPs as a life insurance product for social security. India has survived the recession in a decent manner and with some comfort levels. The public sector stature of the financial institutions has played a major role to withstand the recession. The heavy investments by LIC in the equities have helped stock markets to a great extent to withstand at the present levels. The non settlement of the Development Officers grievances with regards to GOIB thereby discouraging aggressive marketing and diversion of good performing club member agents through CLIA Scheme has been the major factors resulting into negative performance by LIC.

Insurance Sector:

LIC of India Act 1956 Amendment Bill as passed in the Parliament:

The following is the current position of the amendments as passed in Lok Sabha & Rajya Sabha:-

1. Proposed: Instead of full sovereign guarantee by the Central Government to all LIC policies, the words ‘to the extent, the Central Government, may determine from time to time’ will be substituted. This was meant to give power to the government to dilute the sovereign guarantee and also remove it completely as demanded by private Insurers. Current Status : This amendment was not accepted and the sovereign guarantee for LIC Policies will continue as it is.

2. Proposed : To raise the minimum capital of LIC from 5 crores to 100 crores that can be further enhanced by notification. The Government to decide on the funding aspect.

14 Current Status : The minimum capital has been raised to 100 crores with government funding but the further provision of enhancing it by mere notification has been removed & it would require Parliamentary approval.

3. Proposed : To vest powers of opening of branch offices/divisional offices with IRDA instead of the prevalent regulation of vesting this power with the respective Zonal Manager.

Current Status : Instead of ‘Zonal Manager’ the clause has been substituted by ‘decided by the Corporation in accordance to the guidelines by IRDA’

4. Proposed : To distribute 90% of the valuation surplus to the policyholders instead of the existing 95% of the valuation surplus. 5% of the valuation surplus to be credited to a separate account which the Central Government may utilize for any purpose or in any manner that it thinks fit. The remaining 5% will be paid as dividend to the Government. Current Status : The percentage has indeed changed from 95% to 90%. However, it would be with prospective effect instead of retrospective effect. It has also been clarified that the surplus over and above 90% would be given back to LIC for contingency reserve/solvency margins.

5. Proposed : The power to make rules for Agents to be vested with the LIC of India Current Status : The law was amended to vest power to make rules for Agents with LIC of India. The exact impact needs to be analysed.

Insurance Laws Amendment Bill:

The Government had moved for the introduction and passing of the Insurance bill seeking amendments to Insurance Act 1938, IRDA Act 1998. The bill was examined by the Parliamentary Standing Committee on Finance Chaired by Shri.Yashwant Sinhaji. The NFIFWI had submitted our written memorandum on the various aspects of the bill. We were also invited for a personal hearing by the standing committee in which we placed all our views and also followed up with a written statement substantiating our views. It is a matter of great pride that our organization view point has been taken as strong evidence in the report. We are happy that the Chairman and members have given a favourable report in which they have recommended against the proposals. The copy of the detailed report along with the minutes of hearing and our memorandums has already been circulated to all our members. The Insurance Laws (Amendment) Bill, 2008 was introduced in Rajya Sabha on 22 December, 2008 and referred to the Committee for examination and report. However due to dissolution of 14 th Lok Sabha, the Committee could not finalise and present the report. Following the constitution of 15 th Lok Sabha, the Bill was referred to the Standing Committee on Finance.

The Bill, among other things, mainly seeks to:- 1. Raise the foreign equity in Indian insurance company from 26% to 49% and maintain foreign direct investment cap at 26% for the Insurance Cooperative Societies; 15 2. To make life insurance policy unchallengeable on whatsoever ground after five years of issue of the policy and limiting the grounds for challenge during the period within five years; 3. Delete redundant provisions and make consequential amendments to various provisions in the Insurance Act ( that includes amending Sec.42, 42A, 42B,42C)

The Committee headed by Shri Yashwant Sinhaji held sittings and took views from Ministry of Finance, Law Commission, Insurance Companies, Trade unions and others related to the Insurance Industry. On the sitting held on 1 st November 2010, NFIFWI, represented by Secretary General and Resident Secretary Delhi Dr.Vijay Kaushik gave our views on the subject. We are proud to say it was very much respected and appreciated by the Standing Committee.

A brief account of our views and reasons (as given originally in the Report of the Standing Committee presented in the Indian Parliament on 13 th December 2011)

1. One of the principal objectives of the amendment Bill is to raise foreign equity participation in Indian insurance companies from the existing level of 26% to 49%.

“National Federation of Insurance Field Workers of India have opposed this amendment because the reasons on the basis of which the FDI was limited to 26% still remains after ten years of opening up of the Insurance Industry. The recent Global recession has seen the so called world’s giant insurance companies collapse. Increase in foreign capital can change the investment pattern of all companies, which leads to more speculative investment. It is the fact, that it was the advent of Private companies in India with foreign equity that encouraged more investment in ULIPs and stock market. The result is that there is no social security or security of savings. The review and study of the performance of the Insurance industry post liberalization is necessary to understand whether the goals of privatizing the Insurance sector has been achieved and to what extent.”

Expressing identical views on this issue, a representative of National Federation of Insurance Field Workers of India, while deposing before the Committee, stated as below:

“In clause 3, there is Section 2 of the Insurance Act where increase of the FDI from 26 per cent is proposed. After a lot of debate in Parliament which happened in 19992000 we feel that those concerns continue and in a much worse form it is still continuing. It is because once privatisation was done, the entire focus of the private insurance which came into India was not on the social security of the people or the development of the infrastructure in India through insurance funds. It was more focussed on making profits and they entirely switched over to unit linked insurance products which has taken a toll in our country. Now ULIP is totally stock market focussed and the diversification of funds for infrastructure investment itself is at a very low level. The global

16 recession and the falling down of the giant insurance companies isan eye opener for us. Not only that the culture of these companies was reflected very badly because even after the bail out package by the US Government these companies had the audacity to take this bail out package and give bonuses to their Chief Executives and take their customers to treat in England, etc. The Unit Linked is a major issue on which we say that it is the diversification of the entire concept of insurance industry. So, our request is that 26 per cent should be retained.”

Recommendation by the Committee: The Committee are of the considered view that in the present global economic scenario, any further hike in FDI at this juncture may not be in the interest of the Indian insurance industry, whereby the common man too would not stand to gain through insurance, particularly as a means of social security. The Committee would, therefore, consider it prudent to seriously pursue the alternate route of tapping the market for raising the capital required for the sustenance and growth of the sector.

2. Clause 37: Rural and Social Sector Obligations (Amendment) of Section 32B). Clause 37 seeks to amend section 32B of the Act relating to insurance business in rural and social sectors.

A suggestion received from the National Federation of Insurance Field Workers of India in this regard, states as follows

It is proposed to insert the words rural and social sectors, as may be specified by regulation. It should be “rural and social sectors”, as may be specified in the official gazette by the Authority”.

Elaborating on this, a representative of the above organization, stated while tending evidence stated:

On the point of rural and social sector we feel it should continue to be gazetted so that the commitment of the companies for the rural and social sectors is there because there is a suggestion that it should not be gazetted. It is because today if you examine the IRDA reports, there are a lot of penalties being paid by the private companies on the nonobligations of the rural and social sectors. So, when such is the state there should not be any scope for the neglect of rural and social sectors. After the advent of the private companies whatever apprehension we had, the focus on rural and social sectors is only diminishing because in the competition with these private companies, the Life Insurance Corporation is also forced to go behind so many other aspects where the rural and social sectors stands neglected. So, we feel that this protection should be there and the basic concept of Life Insurance industry that it is peoples‘ money for social security and peoples‘ money for peoples‘ welfare in the long term should remain the focus so that India grows is what we like to place before you.

3. Clause 52: Regulation of appointment of insurance agents by insurers in respect of eligibility, disqualification and other aspects. (Amendment of Section 42 of the Insurance Act). Clause 52 seeks to substitute section 42 of the Act to regulate the appointment of insurance agents by insurers in respect of eligibility, disqualification and other aspects.

Suggestions received from National Federation of Insurance Field Workers of India in this regard, state as under:

17 “(i) Though insurance companies have been given right to grant license to insurance agents, however in view of the fact that insurance companies are vicariously liable for the acts of its agent, it is suggested that complete freedom should be given to insurance companies for issues relating to appointment training and commission etc. for its agents. Further requirement for training should be removed for preunderwritten products andInsurers should be allowed to choose agents based on its own criteria‘s. (ii) There is a proposal to allow the Insurer to appoint agents. This will lead to unregulated appointments. Therefore the present provision of ‗Licensing of Insurance agents by the Authority or an officer authorized by it‘ should remain . Otherwise it will dilute the system of licensing and lead to complaints. In view of this the omission in Clause (10) under Section 2 should not be done. Clause (10) should remain as it is. Hence submission proposed in Section 42(D) of the section should also be changed. ‖‖‖ (iii) Clause 52 seeks to amend Section 42 which pertains to the appointment of insurance agents. Earlier the rule was that the agent who is appointed by the company should acquire the requisite qualification like training and passing the test within a period of one year of appointment. This condition was changed in the year 2000 and passing the test and training became a precondition for becoming an agent. This prompted a large bank of insurance agents who are good students, pass the examination fast and take up agency license but they failed totally in the sales front and got their agency terminated, thus increasing the number of termination of agents. The previous condition of allowing one year time to acquire this qualification was better since the insurance company would have utilized this time for judging whether the person concerned would be a good insurance salesman and then only would have nominated him for the required training and test. The persons possessing insurance qualification from Insurance Institute of India (III) or Institute of Insurance and Risk and Management (IIRM) can be exempted from this requirement of practical training/test for the purpose of becoming a agent, because the above mentioned qualification allow the persons to acquire the knowledge of all that is covered in the syllabus of pre licensing examination”

Recommendation by the Committee: The Committee, while desiring that suitable measures are taken towards this end would, nevertheless, also point out that doing away with the role presently played by IRDA in the matter of qualifying and granting licences to insurance agents, as proposed, is inappropriate and fraught with the danger of leading to ineffective regulation of the profession, particularly in instances of unscrupulous act on the part of the agents as also insurance companies. The Committee, therefore recommend that the provisions of Section 42 are revised inter-alia with the purpose of not doing away with the role presently being played by IRDA in licensing and cancelling the licenses of insurance Agents.

18 4. Clause 53: Omission of Section 42A, 42B and 42C relating to regulation of principal agents, chief agents and special agents. Clause 53 seeks to omit sections 42A, 42B and 42C of the Act relating to registration and regulation of principal agents, chief agents and special agents. Section 42A, 42B and 42C deal with aspects relating to registration and regulation of employment of principal agents, chief agents and special agents.

In their memorandum submitted before the Committee, National Federation of Insurance Field Workers of India, has expressed views against proposed Clause 53, stated as below:

“The amendment to Section 42A which was done in 2002, went a step further to curb the unethical functioning in the form of Multi Level Marketing. Under Sec 42A an important amendment was inserted vide Sub Section 9 – ‘No Insurer shall, on or after the commencement of the Insurance (Amendment) Act 2002 appoint or transact any insurance business in India through any Principal Agents, Chief Agent, Special Agent.’ This part of the Section 42A needs to be retained in order to stop the unethical activity of procuring Insurance business through multi level marketing and through unfair means. Insurance agency has been developed to procure life Insurance business and render professional service. In the absence of this specific clause, the law would not stop the appointment of Principal, chief agents and special agents paving the way for exploitation of agents unsupervised sales force, creating instability due to contractual system of working and non accountability (Company will blame the agents and will not own up any accountability). In most private companies and LIC today, even when Section 42A is in place the insurers have been appointing Principal Agent/Chief Agent/Special Agent by camouflaging the names and agency scheme. If these provisions are omitted the Insurers will have a field day and the ultimate sufferers will be the hapless policyholders and agents. The Chief Life Insurance Advisor (CLIA) Scheme of LIC is one such camouflaged scheme in blatant violation of Section 42 A of Insurance Act. Through this scheme the Agents have appointed their spouse and Children as their supervised agents and diverting their procured insurance business in order to earn extra commission facilitated by the CLIA Scheme. The scheme of Chief Life Insurance Advisor 2008 is contrary to the law of land, unfair, unethical and non tenable in the eye of law and in total violation of the spirit of the Amendment in Insurance Act of 1938, brought out in 2002”

Recommendation by the Committee: The Committee note that the amendments proposed under Clause 53 are intended to omit Section 42A, B and C of the extant Act, which deal with registration and regulation of Principal agents, Chief agents and Special agents, a practice which has been debarred with the amendments made in the Act in 2002. While the Ministry has sought to justify the dropping of the provisions, as the system is no longer in vogue, as per the agents associations, the practice continues to be prevalent, albeit surreptitiously. The Ministry has also admitted that Multi Level Marketing (MLM) is growing insidiously in the Indian Life Insurance market and destroying the 19 credibility of the industry and the viability of legitimate distribution channels. In the light of the Ministry’s own submission on this practice, which is a bane for the insurance sector, the Committee express the opinion that it would be appropriate to build in appropriate provisions in the statute for effectively deterring such practices.

5. Clause 57: Omission of Section 44 relating to prohibition of cessation of payments of commission. Clause 57 of the Bill seeking to omit Section 44 of the Act relating to prohibition of cessation of payments of commission to agents.

The suggestions made by Life Insurance Agents Federation of India, National Federation of Insurance Field Workers of India as also an expert, on the omission of section 44, as proposed, are stated as below:

“Section 44 was introduced in the Insurance Act, 1938: (i) 44 (1), apparently to protect the Agent from loosing his earned but deferred income and inserting subsections (a) ,(b) and (c) to protect the Insurers from the liability of payment of renewal commission not before the latent period of 5 years. (ii) 44(2), apparently to protect the heirs of the Agent from loosing their rights to the renewal commission”

The reminiscence of the deletion of this Sec 44 shall be felt by the country in the year 202025, when we are destined to be the 3rd growing economy behind USA and CHINA. The economic prosperity shall come with its own problems of intra mismatch, big population, high unemployment etc. We shall be a Democratic country of 150 crore people of which about 50 crore shall be in the impatient age group of 2030 and seeking for employment. We advocate for the Insurance Agency as a whole time career and as a respectable source of employment, provided the profession gets protection by such Sections as Sec 44 and the Govt takes other measures towards professionalizing the Agency Career (for which we have a separate panel of people working on the scheme). We strongly request you to stop the omission of the Sec 44 of the Insurance Act 1938 and scrap the Clause 57 of the Insurance Laws Amendment Bill, 2008.” iii) There is a proposal to omit this Section. This omission of Section 44 of Insurance Act will deprive the agents of their hard earned commissions. This will encourage companies to even withhold commissions by terminating the agents on flimsy grounds. This was the style of functioning of many companies prior to Nationalisation. This will lead to exploitation of work force who have to work on commissions after spending and ensuring productivity. In order to protect the Insurers interest it can be added that if an Agent joins another Insurer then the Renewal commissions can be stopped.

Based upon a few decades of experience, Section 44 was introduced in 1950 as a measure to give partial protection to the renewal commission of agents. It is now proposed to drop this Section, based on just two years‘ experience. There does not appear to be any logic behind this step which would only show the IRDA, in poor light. The Regulator has not only to be strictly impartial between different sections of the industry, but should alsoappear to be so. This move, to withdraw the protection provided to agents, is sure to affect the image of impartiality. Another aspect has also to be noted. The number of agents just dropping out is many times greater than the number of agents moving from one company to another. If the companies, which

20 complain about their agents being lured away by rival companies, take proper action to prevent drop out of agents, there would be no need to worry about a few agents moving to rival companies. The problem of agency drop out is to be tackled by the IRDA, with the cooperation of all companies, not by amending the insurance Act. With the Bill seeking to omit the entire section, the protection given to the family of the deceased agent, in the form of hereditary commission, also gets removed. So the proposed amendment is not only unfair, but will not also stand the test of law.

Recommendation by the Committee: The Committee find substantial credence in the submissions of the agents ‟ association that the proposal to do away with section 44 of the Act, which guarantees payment of commission / renewal commission to agents, or their legal heirs leaves the possibility of working against the interest of the large number of agents in the Country. The Committee, therefore, express the view that the matter should not be totally left to be dealt with under the regulations, and the statutory safeguard on payment of commission to the agents and their legal heirs should be continued with.

5. Clause 58: Policy not to be called in question on ground of misstatement after five years (Amendment of Section 45 of the Insurance Act). Clause 58 seeks to substitute sections 44A and 45 of the Act to provide that no policy of life insurance shall be called in question on any ground after the period of five years. It also provides that the policy can be called in question by the insurer within the period of five years only in case of fraud. The provisions of the existing Section 45 of the Insurance Act are as follows: Policy not to be called in question on ground of misstatement after two years.-

The National Federation of Insurance Field Workers of India, in their memorandum submitted before the Committee stated as below:

“We strongly oppose this amendment which is completely antipolicy holder and intended to help the private insurance companies to turn down the genuine claims of the policy holder. The existing provision of 2 years should be retained. Only on the basis of fraud the policies should be questionable within 2 years. The insurer should take the safeguards and adequate check measures at the time of entry and not at the time of settling claims. This will only encourage selection of sub standard lives through aggressive marketing and then repudiation of death claims and harassment of widows and children. This will defeat the very purpose of life insurance. At the time of opening the insurance sector, it was promised that the service to the policy holders will be improved and made more liberal. In fact, this is just the reverse, making the existing law more stringent”

Recommendation by the Committee: With a view to serve the interest of the policy holders better, the Committee, however, feel that the period during which a policy can be repudiated on any ground, including misstatement of facts etc., should, be confined to about three years from the commencement of the policy as originally proposed by the Law Commission, instead of five years as proposed in the Bill. 21

Direct Tax Code: The DTC is also being examined by the Parliamentary standing committee on finance. The dangerous aspects are the removal of tax exemption for maturity and also reduced tax benefit for premiums. Tax exemption is focused on long term Insurance policies of 20 years and above. We have represented for review of the Insurance related clauses in the DTC which is harmful to the policyholders and Industry.

Swarup Committee Report : The Swarup committee report is kept in abeyance for the time being. We have put in our best efforts to oppose and stall the Swarup committee report for implementation as it is not in the interest of the people of India, Nation as a whole, insurance industry, LIC of India, lakhs of Agents and their families and Development Officers. We continue to maintain vigilance and remain cautious on this aspect.

Unit Linked Policies: The ULIPs was a major issue raked up by NFIFWI over the years. The ULIPs was a focused product by the private companies. From 2004 onwards LIC too followed suit in the name of competition. We had given a call to focus on conventional business as our analysis was that ULIPs will erode the trust of the people. There were lot of differences on this issue and the tussle with the management on this point reached the peak. We had represented our views in all forums and literally we were the only organization to have opposed the ULIPs. Fortunately for us, Swarup committee started opposing the heavy commissions paid for ULIPs as per the limits eligible for insurance policies. Pursuing the policy focus of removing the intermediaries for sale of financial products, the Swarup committee compared insurance commissions with that of mutual fund commissions, system of “No intermediaries” and advocated for sale of pension products in PFRDA, removal of commissions paid to post office agents for sale of post office products etc. Subsequently, the SEBI was under pressure from mutual fund lobby protesting against the unethical encroachment of life insurers into mutual fund segment through ULIPs. SEBI openly declared war on life insurers and ordered that ULIP was a mutual fund product and that Insurers have to take permission from SEBI. The dispute was dragged to the court of Law and finally the Government had to step in with an ordinance. ULIPs were ordered to be under the control of IRDA but IRDA was directed to come out with stringent norms to check misselling of ULIPs and projection as a mutual fund scheme. The tightening norms saw the limitation of costs and reduction of commissions for ULIPs. The compulsion of risk coverage component was brought in along with a lock in period of 5years. All this differentiated the ULIPs from being a mutual fund product. The insurers started focusing on conventional business and this has resulted in a negative growth of the insurers as well as the insurance industry. In, LIC also there is negative growth due to shifting of focus to conventional business. We are happy that the market share of LIC has gone up to 80%. This should go up to 90 % which will help us fight private companies and also 22 oppose various offensive against us. All these developments have vindicated the stand and proved that National Federation was on right path. The management who penalized us for not selling minimum quantum of ULIPs should answer and be accountable for the damages inflicted on LIC, Development Officers, Agents and Policyholders. In many places agents and Development Officers were manhandled in the field whereas the management continues to enjoy without responsibility. From the “Ignore Development Officers” and “We can do business without DO’s” stand today the management has come to the stand of “Back to Basics”. We want that the management revert back to Basics on every aspect

IRDA Policies and its Impact: NFIFWI has effectively used the advisory committee platform to express our views and also understand the various aspects of the policy direction of the IRDA and the Government. This also enables us to analyse the future trends and prepare our members for the same. The IRDA has changed the syllabus making the exam very difficult for candidates. The compulsory online exam has created a disadvantageous position for candidates in rural, hilly areas and from lower strata of society. We were able to push for the disclosure by companies, judging the market share on various parameters, focus on lapsation, quality business and analysis on number of lives (for accurate data on insurance penetration in India), corrective measures against wrong projections and misrepresentations on bonus and returns in the market, awareness on need for insurance etc. The IRDA has also initiated a grievance redressal machinery with a seminar in which the undersigned was a participant. This will enable the policyholders and customers to directly register the complaint online and IRDA will be monitoring the process from complaint registration to redressal of the grievance. Here it would be important for the NFIFWI to act as a grievance redressal forum to help aggrieved customers fight for justice. We have passed resolutions against the various policies of IRDA. We have submitted memorandums to MPs and have launched a campaign for redressal of our grievances.

LIC and it’s working system: LIC had appointed “Accenture” as a consultant to study and recommend strategies on Sales and Distribution, Product Development, Marketing and Communication, Customer experience. The Management has also asked the consultants to suggest strategy to align the Development Officers and bring them back into the main stream. The consultants had met and interacted with the undersigned and taken our feedback as well from all sections of employees across the country. We understand that the report of Accenture is given to the Management. The details of the report is not yet clear nor discussed by the management. The management has taken initiatives to promote parallel and alternate channels and to reduce dependence on Development Officers. The parallel channel of CLIA is being opposed by us. We are crying foul on the management in allowing spouse agencies to be appointed by the CLIAs thereby diverting D.O’s unit business resulting in rift between the D.Os and agents. The management

23 has outsourced cash collection through empowered agents and SBAs. The management is also moved towards E Policies. The law is being included as an amendment in the Insurance Bill. The introduction of E Feap system in LIC has created havoc with customer services and put the entire administration out of gear causing damage to the reputation of LIC and derailing the marketing and administration. The E Feap system continues to be a problem and management has no fast track solutions. They say there are lot of errors which are being tracked and set right. The very purpose of E Feap is to facilitate many centralized projects, data ware housing and online handlings. The management has spent huge money for this project and nobody is now answerable to the customers. The marketing force is bearing the brunt of the problems having to face angry customers. We have been demanding for a information sharing session with the IT department on the issue of E Feap, Development Officers module in the E Feap and issues concerning D.Os.

A gist of our journey from Thiruvananthapuram Federal Council to Agra Federal Council

We focused for the recovery of the damages due to the onslaught of the management on Development Officers started in April 2004 with the withdrawal of tax exemption at source on CA/ACA and the GOIB 2004 imposed unilaterally on us in October 2004.
The management was to review the GOIB scheme with effect from 01.09.2010. This was prolonged and delayed.
The management granted expenses for conduct of unit meeting on 3 occasions establishing the fact that D.Os need to be paid expenses. The management has made open statements that Development Officers are necessary for the Corporation but it needs to be translated on record and practice.
The management shifted marketing focus to conventional policies from ULIPs, single premiums and short term policies. We are demanding for introduction of more conventional plans.
The Minimum Agents Business has developed into a major issue demoralising agents as well as D.Os. The management has issued circular for any number of reinstatements. This helps in bringing back the agent but in a discouraged frame of mind. Our demand for change in MAB conditions is not yet considered by the management. We have submitted memorandums on this issue to MPs and Government. We understand that the Government has taken a favourable stand on this issue. We are awaiting further information on the consideration of this issue.
The Senior Business Associate was a alternate channel initiated by management. The SBA was a major issue deliberated threadbare by the organization at all levels. Going through the merits and demerits of the matter, we held discussions with the management on keys points of Change of name, Removal of General Consent, Payment of expenses in the form of expenses for their consideration. Management refused to consider the same. The National Executive at Amritsar took a decision to expel the members who violated the direction of the 24 organization and subjected to anti federation activity. I sincerely hope that by now all divisions would have implemented the decision in toto.
The Meal coupon was welcome as a benefit without cost. The multiple conditions imposed in the name of meal coupon eligibility has been resisted and demanded for review.
The changes in the Work norms proposal and GOIB scheme is well known which we will deliberate later. Every comrade should have the conviction and belief in fighting democratically for our rights, benefits and honorable, dignified existence. We should blindly believe and have faith in our Mother Federation, because NFIFWI will never let down anybody. Today we are better placed than the situation that confronted us in 2004-2007. Sweeter fruits and that too in times of adverse conditions will definitely take time. Ultimately truth and logic prevails and wins. Setbacks due to high handedness, crookedness and connivances are all temporary defeats by which we should not be bogged down. We are happy that the time and tide is slowly changing and we are confident that all our struggles will result into glory for NFIFWI in the coming days

The management had called NFIFWI for discussions in March 2010, July 2010, September 2010, January 2011, July 2011, 17 th and 29 th September 2011, 3 rd and 26 th November 2011.

Our representations on Marketing issues concerning our cadre were as follows

Recruitment of ADO’s: This is necessary to sustain our cadre but the unprofessional and unscientific recruitment is harmful. Management has continued recruitment of Development Officers after 2004 even though in a very unscientific manner. Subsequent to our protests the apprenticeship period has has been increased. Subsequent to our protests against the heavy costs of unscientific recruitment, to check large number of resignations the management has introduced a bond of Rs.25,000. We continue to demand regular scientific recruitment of Development Officers, restoring the apprenticeship period to 9 months, providing proper infrastructure facilities and good practical training.

Review of Special rules 1989 as amended in 2009: We had been representing against the unilateral changes proposed in Special Rules 1989. There were many dilutions in the proposal on unilateral changes in Special Rules 1989 and the Special Rules 2009 was unilaterally implemented in November 2009 effective from 1 st December 2009. Our stand after the introduction of Special Rules 2009 is as follows- We strongly protested against the Notification of Life Insurance Corporation of India Development Officers (Revision of certain Terms and Conditions of service) Rules, 2009 and Chairman’s instructions for implementation of Special Rules 2009 without a signed MOU. The Special Rules 1989 was a signed MOU.

25 1. The management and government has not considered our representation for stalling the negative and adverse changes in the special rules 1989. We had been representing that only positive changes and that represented by NFIFWI should be considered. 2. The Special Rules is a work norm for all seasons and all times. The whole world has been facing recession and in India the situation is worsened due to natural calamities. Many newly recruited Development Officers either resigned or were terminated due to inability to achieve the harsh work norms under Special Rules 1989. The new Special Rules 2009 has decreased the expense limit from 22%-26% to 19%-22%. This will increase the burden and also deprive the restoration (which was being represented by NFIFWI) of incentive above 5 times the SFYPI. (a) The rural area which is an existing reality of our country has been removed from the area definition. It is extremely difficult to work in rural areas. (b) The grant of concession to only persons above 55years denies the existing benefit to persons above age 50. (c) Removal of the provision of adhoc annual remuneration is a adverse change affecting Development Officers badly. By removing the provision for adhoc annual remuneration there is uncertainity of target till the last payment received in the appraisal year. With adhoc annual remuneration the required target can be worked on from the first day of the appraisal year. All the above conditions adversely affect Development Officers very badly. 3. We have been representing for the removal of decrement as a disincentive on the logic of protection of earned increment and as it affect the pension also. The decrement should not be a punishment. Every manager gets competition rewards running into lakhs of rupees and employees gets Productivity linked lumpsum incentive if the targets are achieved. But in case the targets are not achieved there is no penalty or disincentives for the managers or any employee. The expenses for the marketing and performance are all borne by the Corporation. In the case of Development Officers, no expenses are being paid for the performance of their duties and even the earned increment is snatched away for future non performance. This is unheard of in any kind of competition or competitive performance appraisals. The disincentive table has been changed adversely which affects Development Officers badly. The deferment of disincentive clause has been altered which affects us adversely. 4. We have been demanding for automatic absorption into Class I administration or Class III based on qualification and experience. This is required to give a sense of security and belonging to the Development Officers. After doing so many years of marketing activities, it will be unfair to deny employment in administrative job on the basis of an interview. Hence if somebody is not able to perform well in marketing due to various reasons, then they should be automatically absorbed in the administrative job. 5. On the above grounds the new special rules repealing the Special Rules 1989 which was a MOU and this change adversely affecting us is unfair in law and practice. 26 6. In the last few years many Development Officers working in areas affected by natural calamities are facing hardship and the hardship due to the global financial crisis. The floods in Bihar and Assam have totally derailed the working of Development Officers. The long bandh in Jammu & Kashmir and the displacements due to terrorists and Maoists attacks in various places across the country make matters worse for the Development Officers. Recently the cyclonic storm “THANE” has displaced D.Os in Vellore division. The global recession and the aggressive competitive scenario have made the working of a Development Officer very tough. 7. The non provision for payment of marketing expenses, ACA and incentives to all up to 20% expense limit and on SFYPI above 5 times annual remuneration will adversely affect all Development Officers. This makes the Development Officers working very difficult and also the Development Officer has to incur expenses from his own resources for performing the marketing duties. 8. The management has also reduced the credit for various new policies thereby directly increasing the targets required to meet the basic expense limit norm. The SFYPI is the reduced premium as per the different credits allowed for various policies. We have been representing that 100% credit should be given for all policies and the Development Officers should be appraised on number of policies. 9. We have been representing for Redefining the “Definition of Annual Remuneration” to exclude the marketing related expenses, wages for National Holidays and Election duty days, vehicle insurance and road tax, arrears of Wage Revision if any, PLLI, Maternity and Paternity leave wages. This has not been considered. 10. The deletion of the term “Additional Conveyance Allowance” from the definition of annual remuneration is done to support and validate the stand of management denying the payment of ACA which was a agreement and notification. The Development Officer without ACA is not able to get the expenses for repair, maintenance and depreciation of the vehicles. Otherwise the management should introduce a car scheme like that of managers.

We have represented to the Government and Management to kindly review and re- examine the new Special Rules 2009 which is adversely affecting the cadre of Development Officers. We are pursuing the cause very vigorously from all sides.

Review of Incentive Scheme GOIB 2004 & 2007: Review of Incentive Scheme GOIB 2004 & 2007 has been pursued. Our representation is for redressal of the pinching issues of Graded credit, payment of ACA and Expenses, removal of the disincentive on the element of growth, increase in the quantum, floor level eligibility, removal of no man’s land in the Incentive scheme, 100% credit for all plans and rationalization of all points in a fair manner. The management was reluctant to initiate discussions on this matter. The market share of LIC was drastically going down and we hold the management’s various policy decisions responsible for this. The management had unilaterally implemented the GOIB Scheme 2004 scheme stating that 27 the market share needs to be increased to 95%. Instead the market share had drastically reduced. After the improvements in 2007 now the market share has increased to 78%.

Improvements in GOIB Scheme and its review:

In the matter of GOIB we have been seeking review for improvements which are as follows

(a) We request that Expenses in the form of expenses should be extended for regular agent’s unit meetings, recruitment of agents, reimbursement of actual telephone and mobile bills, internet charges, PR activities and expenses for marketing activities and restoration of Additional Conveyance allowance etc. (b) The graded system has created lot of infighting amongst the marketing force and the Swarup committee recommendations have disturbed the marketing force with a sense of insecurity. We are happy that the management has revisited the allotment circular. We are happy that inorder to reduce the agents termination and give them support to perform better, agents who are performing upto Rs.5 lakhs FYPI are made allotable. Any agent irrespective of the service period and performance, needs the support of the Development Officers for sustenance and better performance. We requested to review the graded system of credit and grant full credit for all business done by all agents. (c) The floor level for incentives should be restored to the 20 % level. Today it is difficult to achieve the same as the credit for many policies has been reduced. There should be restoration of the previous agreement in lieu of 2 nd year lapsation. (d) We are happy that the No Man’s land is diluted. Our stand is that there should not be any “No man’s land” in any elements in the Incentive scheme. (e) Adequate increase in Quantum of Incentive. (f) 100% credit for all policies and increased credit for single premium. (g) Removal of “Qualifying premium” condition for additional IB. (h) Reasonable number for minimum number of agents and number of lives. The steep MBG conditions, compulsory online exams and threat of Swarup committee recommendations and IRDA regulations has already disturbed the recruitment scenario and made things more difficult for us. (i) Corrections in some of the administrative instructions, calculation procedures and programme.

Our latest follow up letter was placed before the management

CLIA Scheme and grant of agency to spouse of CLIA: There is lot of coercion in making the club members apply for CLIA Scheme. The CLIA scheme has been diversifying the agents from concentrating on their own business. The number of MDRT agents and club memberships have been drastically reduced. Even the non performers are being rewarded through various relaxations which is against the interest of the Corporation. The CLIAs are 28 appointing their spouses and immediate relatives as their agents through which business is diverted for higher commissions. This illegal and unethical practice is being overlooked which is against the interest of the Corporation and affecting the D.O - Agent relationship. Our complaints all over India in this matter, is being ignored. The intention of the Corporation to tap more agents and business through CLIA is defeated by allowing appointment of one’s spouse as their agent and diversion of own business. The available data will definitely substantiate and prove this fact. We have requested the management and higher authorities to intervene in this aspect. We have submitted petition to IRDA, Petitions committee and Finance Ministry on CLIA.

MBG conditions for agents : The notification increasing the MBG conditions are harmful to the agency force. Our demand is that no agent should be terminated. We reacted strongly against this notification through submission of memorandum and demonstrations. We request for the kind consideration of the change of conditions of number of agents required in the working conditions for incentive and review of the MBG notification. As a relief any number of reinstatement is allowed.

Charter of Demands and Wage revision: We have been able to clinch a historic Wage revision this time. Wage revision discussions were held in July 2010 in the back drop of a court case which was blocking the wage revision talks. Finally the wage revision was discussed and notified in October 2010. Against our demand of a hike of 40% we have been able to get a good deal. Good hike, Basic pay above HGA in all stages and at par in one stage, PLLI excluded from cost, Medical benefit in lumpsum, increased mediclaim, increased housing loan, increased group insurance, Gratuity level increased etc are the highlights. There are unfinished aspects in wage revision which we have represented and continue pursuing. They are

I. Relief: Unlike the other class of employees the wage revision increases the burden of Development Officers. Development Officers have to put in extra hours of work and effort to secure the additional business to work at the prescribed cost. Any additional loading will harm the Development Officer adversely. Therefore to take care that we are not burdened and adversely affected, (a) The total arrears should be exempted from cost for work norms. Today 50% of arrears is exempt from cost. (b) The Development Officers are working on cost norms and therefore wage revision adversely affects them in many areas. Therefore the Development Officers should be given relief in basic cost upto 5% on account of wage revision (Refer Annexure) (c) All adverse impacts on various benefits of Dev. Officers due to wage revision should be waived. II. Pay scale structure anomalies and unfairness: 29 The Development Officer which is a Class II cadre in the LIC has not been placed in the appropriate slot by giving an appropriate pay scale structure. The basic pay of AAO which is the starting scale of a Class I officer is Rs.17240/- and the starting scale of HGA which is the highest level class III is Rs.11425/-. The starting scale of Dev Officers who is in class II cadre is only Rs.11535/-. The eligibility qualification in class II is Graduation whereas in class III it is XII. On completion of Graduation the class III employees are paid Graduation allowance of Rs.530. This takes the Basic pay above Development Officers. Further the Class III is given opportunity to earn special pay of Rs.820 for passing exams of MBA, Fellow, ICWA etc. All these puts the Development Officers in a discriminated position in the wage structure. These anomalies and unfairness has been represented continuously but not settled so far. These anomalies are affecting our pension and other benefits also in a big way. Therefore these anomalies and unfairness should be settled by all means.

a. The starting scale of Dev. Officer should be improved reasonably and fairly positioned. b. The maximum stage of Rs.28865/- after 21 stages should be increased by granting further two stages. c. There is an anomaly in the pay structure of Dev. Officers as compared to the HGA and AAOs where in the increment granted in the first two stages is Rs.755/- for HGA and AAO it is Rs.840/- Logically and in all fairness the increment for D.Os should be around Rs.800/-. Also in the fourth stage the increment is Rs.825/- which is much below the increment of Rs.840/- for the HGA and AAO. This affects the whole structure of the scale of pay of Dev. Officers and there is unfairness. d. The stagnation increment for Dev. Officers has been a maximum of 3 at an interval of 3 years. We have been demanding for parity of stagnation increment to that of HGAs. Therefore we represented to grant six stagnation increments @ one increment every two years. The stagnation increment should be granted to all Dev. Officers who have completed 2 years of service and the unfair conditions for granting stagnation increment should be removed. e. The anomaly created out of bunching of first 3 stages in the earlier wage revision should be undone by re-fixing the Dev. Officers at the new scale as per their seniority. f. Special pay/Professional pay should be granted for passing technical and professional examinations like MBA, Insurance marketing exams etc. This is very much necessary to encourage up gradation and efficiency in a liberalized and dynamic industry. This is available even to bank officers. This will also help set right the existing unfairness and discrimination. III. Cash Medical Benefit: This is paid to class I and class III at the rate of Rs.8000/- and Rs.4000/-. This is considered to be deemed expense and hence not taxable. The Dev. Officers has now been given cash medical benefit and offered only Rs.5000/- without cost and bills. We have represented for a fair payment of Rs.7000/- and payment of arrears. IV. Marketing, Grooming, PR Expenses: The Dev. Officers basic duty is marketing life insurance. The nature of job requires extensive traveling and incurring of necessary expenses. The necessary expenses include marketing expenses, grooming expenses and PR expenses. The Dev.Officers should

30 be paid these expenses as part of salary in order to perform and meet the basic targets/cost of a Dev. Officer. The class I and class III are paid functional expenses therefore we represented for considering the above expenses as part of wage. V. Difficult Area Relief: Across the country there are many areas where normal life is disturbed due to various environmental and political factors. For eg; Jammu & Kashmir, North Eastern states, Maoist affected areas etc. In these areas it becomes extremely difficult for a Dev. Officer to move around and procure business. We have to face lot of hardships physically, mentally and financially. Unlike other class of employees we have to bear and suffer various causes arising due to the disturbances. Therefore we represented for a difficult area benefit / expenses. VI. Health Care: We represented for total health care or improvement in ex-gratia medical benefit, demanded more centres for cashless facility and coverage of more diseases under cashless facility VII. PLLI: The PLLI should be continued to be paid on the corporate performance. PLLI at the Division level will take away the enthusiasm of employees of some divisions mid way if they are not expected to reach targets. This will hamper the Corporations growth and destroy the team spirit. VIII. Pension: Third option for Development Officers who have not opted for pension is demanded. The present pension scheme should continue for all new employees also. Otherwise it will lead to segregation of employees which is harmful to the Corporation. We had been representing for the clarification on the point of pension for terminated employees. The clarification required is that, for Dev. Officers terminated under work norm, full pension as per rule should be payable. IX. Welfare Measures: We have been demanding for welfare measures in the form of petrol coupons, school fees provision etc. We have demanded that the Staff quarters should be allotted to D.Os without discrimination X. Recognition: NFIFWI should be granted recognition as a trade union and also grant Special leave for leaders. XI . Housing Loan: We have taken up the issues related to additional loan, term period, conversion to cadre loan, etc with LIC HFL. The issue of subsidy is sorted out.

Meal Coupon Issues:

NFIFWI held discussions with Personnel department and marketing department for improvement in Meal coupon conditions. Our demands represented are as follows

1. The multiple conditions of Login and Productivity (Number of Policies) continue to be attached which is unfair and unjustified. There should be only one condition either Log in or Productivity (Number of Policies). 2. The login acts as a deterrent and obstacle to hassle free marketing oriented working. The marketing activity does not have limitation of time, money and distance. Now the issues are more with the Area opened up. Log in should be allowed in any office within the division or City area of operation in urban areas. 31 3. There is also a issue where urban D.Os who have to login are forced to sign the attendance register, when the circular specifies muster signing only for class III and IV. When the Class I and D.Os who are SBAs only log in without signing the attendance muster, it is humiliating and disturbing that D.Os who log in are asked to sign the muster in some places. The D.Os should not be asked to sign the attendance muster. 4. Management should appreciate this fact and remove the hurdle of time. If login is the single condition then D.Os must be able to log in from any city branch office or Divisional office. 5. If the Number of policies is there as the single condition, then it has to be on yearly basis and the meal coupon has to be granted proportionate to the Number of policies. 6. The Development Officers are required to undertake local tours for marketing activities. They are eligible for D.A as tour expenses bill, which are taken into costing. When the meal coupon is given, the tour days should also be counted as our DA is costed unlike other class of employees. The tours of D.Os for the purpose of Meal coupon should be classified as marketing and non marketing tours (ZTC Training and Meetings where the TE Bill is not taken into cost). Therefore Meal coupons should be granted for the days the D.Os are on marketing tours.

Group Insurance: The management had increased the Group Insurance to Rs. 8 lakhs. Our NFIFWI group insurance is for Rs. 5 lakhs. We have represented and requested for an increased Group Insurance of Rs. 25 lakhs and also for reduction in premium.

Management Concerns: Management concerns expressed to NFIFWI is about high termination of agents, low recruitment of agents and negative growth of business. Today the management has only themselves to be blamed. The policy of MBG has reduced the agency strength, the IRDA policies need to be resisted by LIC management also to help good recruitment. The over focus on ULIPs , denial of marketing expenses and reduction of IB, impact of global recession, negative media reports about LIC are the major reasons for the negative growth this time.

Alternate Channels and Direct Marketing: We have been resisting the Alternate channels on various logic and reasons. The management has brought in Bancassurance, FSE’s, Corporate agents, Brokers, CLIAs, DSEs, SMEs etc. The management’s focus has been to reduce the dependability on Development Officers and get business from other channels. Direct Marketing and online marketing are potential threats in the long term. We have to outsmart these and outgrow them.

32 Our strategies and Direction Our strategy has been to resist the onslaught by the Management and the Government patiently on paper and through struggles. We had said clearly that ours is a long drawn war and that we have to patiently fight it out. We represented all issues logically, reasonably and firmly. Our internal communication system was made stronger because of which members were well informed and the entire membership was representing these issues at all the meetings and available forums. A comparison of the situation in GIC will prove that our strategy and direction was right. The management was finding it difficult to prove and establish their reason and logic mentioned earlier for the policy decision of GOIB 2004 and changes in the Work Norms. Added to this there was pressure on the Finance Ministry and LIC management to ensure a good market share of 85% to 90%. In the process the various logic put forth by us got accepted in the wake of adverse statistics and performance statistics. The scenario of global recession and downfall of stock market once again strengthened our stand, reasoning and logic of our resistance. The Management, IRDA and Government are advocating adoption of global practices done by multi national companies. The global recession and downfall of major Insurance companies is an eye opener for India. The LIC which works on an indigeneous system has proved itself stronger by withstanding the recession period and also rescuing the stock markets. The decision for recruitment of Development Officers, allotment of Agents, dilution of Graded system, certification of expenses, increase in FCA, proposed removal of condition of Net Agents, dilution of No Man’s Land, dilution of Growth element, raising of eligibility floor level, expenses borne for the unit meetings, dilution in the earlier proposal of work norms, etc are proof of the acceptance of our stand. In allotment of agents, management has stated that agents performing up to 5 lakhs FYPI needs support of Development Officers. This helped us to substantiate our logic for demanding removal of Graded Credit which is supporting the need for Development Officers to support agents and develop the marketing force and agents productivity. Added to this was our resistance to the various alternate channels and parallel marketing force in our own style and means. The performance of the alternate channels has been far below the expected and targeted levels. Rather the management’s direction of non dependence on Development Officers and creation of alternate channels for business dependence has failed. This has lead to a situation of again winning the confidence of Development Officers. In this situation too, the management is trying to induct more Development Officers thereby trying to ensure that more Incentive and expenses need not be given. The management continues to maintain that they have to reduce the cost for IB and hence IB cannot be increased. Our stand has been that the marketing cost in the competitive scenario only increases hence it is unfair to reduce the IB and deny expenses. Basic marketing expenses have to be borne by the Corporation. Our struggle continues to establish the fact that D.Os are the most successful channel and insurance marketing cannot happen without them.

33 Organisational activity, reportings and initiatives: The total strength of our Development Officers class is 26,942 as on 31 st March 2011 (including PDOs and ADOs). Our cadre strength has grown over the years. On record as per subscription received the membership strength is 18743. This is way below the official figures of LIC. We call upon all Divisional Federations to inform the exact cadre strength and also submit the list of members along with the subscription payment. We have 112 divisions with Thrissur, Begusarai, Patna II and Burdwan being the latest additions.

We had decided and directed all divisions to initiate the process to register the divisional associations. We are proud to inform that Kottayam and Trivandrum Divisional Associations have successfully registered the units under the Trade Union Act. This will help all our Divisional units to get registered under the Trade Union Act. This will give our organization legal sanctity, protection against harassment and security of employment. We call upon all Divisional units to immediately start the process of registration.

The News Bulletin is printed and posted regularly. Total address received is 19014 with 1025 Deletions. We have still not received the address list from Allahabad, Kanpur and Jabalpur. We request the 5 bifurcated divisions to send their separated list of addresses. We have posted 18017 News Bulletin last month crossing the 18000 mark. This was a big task and challenge when we started the process of address compilation in 2007 and today we are happy that the entire system is set right. The entire credit of successful compilation and updation goes to my Trivandrum Team colleague Com. Hari.T.Pillai who has put in lot of efforts. Regular updation is also very important. Last year in 2011 only 17 divisions have responded to the updation request. We have been in a position to print News Bulletin regularly, improve the quality and content with a social responsibility and image. Bilingual printing of News Bulletin has started again with a gap and this has been made possible with the help of our veteran leader Com. I.S.Bharati who have supported for the timely hindi translation. We sincerely appreciate his efforts and services to the organization

The financial position of Central federation, Zonal federations and Divisional federations has improved with the collection of Levy. The financial strength is an indication of the commitment and faith of our members in this great organization. The statement of accounts placed before you reflect a very healthy sign and we are proud that the total funds as balance has crossed Rs.50 Lakhs without levy and with levy the total funds have crossed Rs. 1 crore. There are some pockets where the dues are more than one lakh. Our sincere appreciation to the Divisions which are Dues free. The list is the longest in the past 20 years of my memory and 31 divisions are totally dues free. The divisions are Shahdol, Bhuvaneswar, Muzaffarpur, Bongaigaon, Jalpaiguri, KMD I, KSD, Dehradun, Amristar, Delhi I, II, III, Jalandhar, Shimla, Cudappah, Asansol, Hazaribagh, Bilaspur, Raichur, Rajmundry, Visakhapatnam, Ahmedabad, Goa, MDO I, Nagpur, Nanded, Kozhikode, Madurai , Trivandrum, Thrissur and Ernakulam. Last NEC had decided to clear all dues and pay the Levy within one month. So far 46 divisions have paid the Levy. Our hearty 34 congratulations to the leadership of these divisions for ensuring financial discipline. There are many divisions who are defaulters for a long time. There is no valid excuse or reasons for any division to remain a defaulter. It is high time that this FCM should decide a penal interest for delayed payments so as to encourage timely payment of dues.

The Central secretariat meetings were held in June 2010 at Indore, February 2011 at Chennai, September 2011 at Amritsar, September 2011 at Mumbai. The National Executive committee meetings were held in June 2010 at Indore, in February 2011 at Chennai, and September 2011 at Amritsar.

The organization carried out its activities around the country. The Zonal Councils of Central zone was held in January 2011, North Central zone in September 2010, Eastern Zone in January 2011, Western Zone in October 2010, East Central Zone in June 2011, South Central Zone in May 2011, North Zone in April 2011 and South Zone in September 2011. Organisational activities have been going on very well. Com. S.Anand, Com. T.A.Lakshmikantha, Com. Anil Singh and Com. Prabhat Kumar, Com. Karthik Raja, were newly elected members of the Central Secretariat.

Wherever biennials were due in divisions it has been conducted. We have been directing all divisions and Zones to conduct regular Leadership camps, Trade Union workshop and orientation sessions for ADOs and PDOs. We have to support and help the new D.Os to establish and become stronger. They are the future of LIC and NFIFWI. We are happy that many of our Zones and Divisions are taking earnest initiatives in that direction. The leadership of South Zone conducted an excellent Trade Union workshop at Kodaikanal in May 2011. North Zone conducted a two day leadership camp at Delhi for Divisional Presidents and Secretaries. Coimbatore, Trivandrum, Thrissur, Kottayam, Kozhikode, Chennai I, Aligarh, Lucknow, Kanpur, Gorakhpur divisions conducted Trade Union workshop and educational seminars. A grand send off ceremony to Com.K.P.Singh was arranged by Aligarh division and Khurja branch. The Eastern Zone has conducted training camps for our leadership, and orientation session for ADOs and PDOs in all the divisions of Eastern Zone. Many divisions of Western Zone also conducted orientation sessions for ADO’s and PDO’s. Leadership camps are necessary for the organization to groom good and knowledgeable leaders. Our dream is the development of our Kalvit Institute into an institute of excellence. We have to seriously plan and develop this Institute. We have taken an initiative and brought out a Hand book of NFIFWI with essential information, Constitution, History Glimpses and NEC directory and sent a copy each for all branch units, Division office bearers and Zonal office bearers. This will be definitely helpful for our comrades as a quick reference material. The comrades linked with Parliament March episode who were suspended on direction from CS/NEC have been readmitted by the respective divisions. We need to take a decision whether permission from higher forum is needed for readmission.

35 We had given calls for campaign by submitting memorandums to MPs against various issues concerning the Government and IRDA. The entire organization has implemented it. However a proper feed back from all zones and divisions have not come to us.

Our call is that every Division should have their own office and guest house. Also every Division should do something for the society and the underprivileged. This will also reflect the Organization very positively. Congratulations to Gorakhpur division who has been regularly conducting family meet of the members and their families. Com. K.K.Sreevastav and Com. Sanjay Sahi deserves appreciation.

The organization celebrated Foundation day of our organization and observed Kalvit Saheb’s birth anniversary and death anniversary with various charitable activities and social contributions across the country. Many divisions conducted medical camps and blood donation camps. Many divisions have contributed generously to orphanages, old age homes and for medical care of poor patients.

The website is functioning properly and regular updations and improvements done. The website has developed in a excellent manner over the last couple of years. The members across the country are appreciative of the website for being very informative. The financial news press link up is a big source of knowledge updation for our members. The total members registered so far has gone up to 9970.

Provident Fund committee - The Federal Council at Chandigarh had passed the resolution that the whoever is the PF Trustee should submit the resignation at the time of Federal Council to enable the Secretary to decide on the nomination of the PF Trustee to be freshly nominated. Presently Com. Balasubramanian of Chennai II is the PF Trustee from 1989 onwards.

We have taken a decision first to suspend the members who violated the directions regarding SBAs and then to expel these members for anti federation activities. In many places the actions were not initiated on time. Even now all Zones and Divisions have not given their feedback as requested. We decided in Amritsar NEC to levy a penalty of Rs.5000 who have appointed CCAs by giving consent for 50% credit and to suspend for violations after NEC Chennai.

I wish to inform the organization that the management is not granting special leave to the office bearers. Due to shortage of PL, the Secretary General’s special leave application for organizational work is treated as EOL with consequential recoveries and appraisal postponement. This information is to ensure that there are no unwanted rumours. We are fighting for grant of Recognition and grant of special leave for office bearers. The management at various levels was trying to divide the organization, spread misinformations and rumours against the NFIFWI stand and defaming the leadership. We had given a call in the NEC for reacting against such acts of the 36 management in any forum. Also there were unwarranted anonymous mails doing rounds damaging the organization and disturbance due to spread of rumours, unauthorized and anti NF SMS. Fighting an outside enemy or opponent is easy but fighting our own forces from within is the worst challenge. We have issued clear cut warnings and warned of action against defamation. We had also sent a message across the country that there will be no further warnings and that the complaints will be proceeded with. The organization is strong at all levels and members are more aware, very vigilant and active at the branch and divisional levels. The organization has to continue its regular activities and strengthen the units. Only a strong organisation can resist any kind of injustice and achieve fair solutions and our goals.

The vigilant and information contributions by many comrades has been helpful to the organization. We appreciate their services and call upon all members to contribute their thoughts to make our National Federation stronger.

Achievments:

1. Sovereign guarantee for LIC policies retained, LIC to retain PSU status 2. Insurance Laws Amendment Bill – Favourable standing committee report. 3. Stalling of Swarup Committee. 4. Good Wage Revision & 50% arrears exempted from cost. 5. PLLI exempted from cost. 6. Medical Expenses – Increased to Rs.5000, without cost and without bills. 7. Meals Coupon Scheme without cost. 8. Increase in Housing Loan 9. FCA increase - Awaiting final circular on further increase up to approx Rs.15,000 10. Opening of Divisional Area of operation for D.Os 11. Granting agency to relatives of employees and agents was allowed. 12. Credit for Mail Order Business granted. 13. Increased Car Advance 14. Promotion rules relaxed further 15. Modification in GOIB Scheme awaiting full settlement. Graded credit diluted further to 100/80/70, Removal of Net Addition of Agents condition, Dilution of “No Man’s Land”

Our demands placed before the Management for early solutions and favourable review for further improvements of some of the issues for which solutions were given.

1. Favourable Review of GOIB scheme of appraising the Development Officers with effect from 01.09.2010 and retrospective effect for review of Graded credit and Growth elements. We insist

37 for removal of graded credit, expenses in the form of expenses, basic FCA of 200 litres for all D.Os without cost, payment of ACA, growth as a Incentive point, removal of No Man’s Land. 2. ULIPs lapsation should not be reduced from the Development Officers premium as the ULIPs policy is market linked and the D.O is not responsible in any manner for the lapsation. 3. Payment of the Big Leap competition prize. This competition period was up to 28 th February 2008 and denied in an unfair manner. 4. Anomalies of Wage Revision which is adversely affecting the class of Development Officers. Our demand is for 100 % cost free arrears. 5. Review of Special Rules 2009 as it is adversely affecting Development Officers 6. Review of the circular for purchase of four wheeler - removal of conditions of Productive agent and pre closure of loan without conditions 7. Cost norm waiver for Development Officers of Srinagar division, Imphal and Maoists affected areas and Development Officers of Vellore division affected by the cyclonic storm ‘THANE’. 8. Settlement of Meal coupon anomalies and issues of login. The Development Officers are disturbed with multiple conditions creating obstacles for marketing activities. The D.O cannot be insisted to log in as well as sign in the Muster. 9. Release of Stagnation increment for all D.Os working on stipulated cost norm. Removal of the old conditions of CR and being an incentive earner. 10. Settlement and condonation of Nagpur, Pune, Nasik and pending EOLs. 11. Clarification for payment of pension to Development Officers terminated under work norms. (It was agreed to be issued by the Personnel department long back but still pending. 12. Instructions for provision of Infrastructure, Space and Table and Chair to all Development Officers. The unscientific recruitment of large number of Development Officers without proper infrastructure is causing lot of harm and humiliation. 13. All Development Officers should be uniformly allowed to recruit agents and procure business all over the country. At present only a small section is allowed in a partisan manner. We place our protest on the circular allowing 60% recruitment outside HQ for a section of D.Os which is a continuing discrimination. We call upon the management to remove this discrimination and allow all D.Os to operate across the country. 14. The agent should be allowed to place business in the local branch or the Headquarter branch of the concerned Development Officer depending on the conveniences. 15. Review of the Allotment circular to remove the detachment clause and also for eligibility to allot, the calculation of 5 lakhs FYPI should be done deducting the single premiums. 16. Review of the MBG conditions for agents. Lakhs of Agents are being terminated especially in the rural, hilly and tribal areas. 17. Removal of the condition of Net addition of agents for various aspects in view of the harsh recruitment conditions by IRDA, MBG conditions etc

38 18. The IRDA should be persuaded for an option of online or offline exam for agents recruitment, time frame for issue of NOC for transfer of agency from another insurer, withdrawal of persistency norms for renewal of agents licence which is unreasonable. 19. Uniform norms for confirmation of PDOs as per Special Rules. 20. E Feap software implementation and the consequential issues 21. The long promised D.O’s portal with all the functional and servicing facilities and presentation software is not yet provided. We look forward to the manual for sales force which has been initiated by our ED (Mktg). 22. Payment of arrears of the medical lumpsum reimbursement. 23. Various individual representations.

On two important matters which was affecting our cadre, there has been a Supreme Court decision and High Court decision

1. That the Development Officers given penalty due to work norms cannot be permanent in nature and that the term has to be defined. 2. In case of a harsh penalty in a MHR case of Com. K.Subramania Pillai (Penalty of putting the employee at the minimum basic thereby losing 9 increments) the Supreme Court has upheld the High Court decision of restoring the emoluments w.e.f 1996.

Threats to the organization and Guidelines for the future:

1. The difficulties in recruitment of agents in a tough scenario and market conditions. 2. The main threat to our organization would be the implementation of the Swarup committee. 3. The harmful effects and impact of Insurance bill on the marketing force. 4. The recommendations of LIC’s consultant “Accenture”. 5. Non grant of recognition to NFIFWI. 6. The harmful impact due to Direct Tax Code 7. The concept of Direct Marketing and Online marketing being implemented by LIC. 8. Compulsory online exam, persistency norms and reforms in the name of professionalisation and regulation.

The guideline for the future is that in the wake of competition the market is naturally going to be tough. We have to consciously upgrade ourselves regularly from the professional aspect land technology wise. The up gradation of individual and as a group is important and should be through continuous education and training. Our relationship building exercise with the management should continue very strongly. We cannot expect 100% alignment with the management until the compulsions of government direction pursuing the implementation of privatisation agenda is over. The IRDA regulations and new concepts are bound to happen. We will have no choice but only to campaign and resist for ensuring a healthy market to safeguard good practices. Our liasoning with 39 Government, political parties and Members of Parliament, IRDA, CBDT should continue strongly. We should implement the decision for Kalvit Institute for leadership training and professional training at the national level, a legal wing and to make use of the RTI Act provisions

Acknowledgements:

Comrades, I have tried my best to cover all aspects of our organization while presenting this report before all of you. If any matter has been left out inadvertently, kindly excuse me. I place on record my sincere appreciation to our former President Com. Uttam Jagdhane, Joint secretaries Com. R.V.Rao and Com. Lalit Kumar Dixit who contributed as team members for a good wage revision. I place on record my sincere thanks to our President Com. G.Nagesh stood with me as a friend, philosopher and critic to share my burden and carry out our strategy. My sincere gratitude and thanks to our senior leader and Vice President Com. K.P.Singhji who advised and guided throughout. My sincere thanks and gratitude to the team members of the Central Federation, Joint Secretaries Com. B.Manoharan and Com. Tarini Prasad Mohapatra , Treasurer Com. K.Venkatesh, Resident Secretaries Com. Madhav Shinde, Com. Dr.Vijay Kaushik and Com. V.B.Mohan for helping and guiding me to function effectively.

My sincere thanks to the members of the Central Secretariat who guided, supported and encouraged me. As a team we were able to face the management onslaught and protect the interests of NFIFWI organizationally and on the negotiating table. My special thanks to Com. I.S.Bharatiji who as a senior leader advised and guided me. Com. I.S.Bharati retired from the services of the Corporation and from National Federation leadership in January 2011. We wish him a very happy and peaceful retired life. We place on record our appreciation, respects and salutes for his great contributions and services rendered to NFIFWI and its members. We salute the contributions of Com. N.K.Ganguly to the cause of this great organization. Com. V.B.Mohan retired from the services of LIC and NFIFWI wishes him the very best. We salute his contributions to our organization.

I whole heartedly thank the members of the National Executive who as the pillars of National federation supported, guided and implemented the decisions of the organization. I respectfully thank all our veteran leaders specially Com. Madhu Dandavate, Com. K.Chandrasekharan, Com. A.V.Tyagi etc whose advice and encouragement were a source of inspiration to me. I also place on records my sincere thanks to all our veteran leaders for being amidst us to bless and guide the organization. My sincere thanks to the H’nble Member of Parliament Shri. Basudeb Acharia, Shri. Nitin Gadkari, Shri. Yashwant Sinhaji, Shri. Murali Manohar Joshiji, Shri. Moinul Hassan, Smt. Sushma Swaraj, Shri. Ananthkumar, Shri. Oscar Fernandes, and all other MPs who helped us in opposing the harmful proposals of the Insurance bills.

My sincere thanks to our management who started the initiative to redress many of our grievances. We express our gratitude to our H’nble Prime Minister for having heard our grievances 40 and directed for a detailed assessment of the situation ensuring the job security of our class. Our sincere thanks to the Finance Ministry officials, H’nble Ministers Shri. Pranab Mukherjee, Shri.Pawan Kumar Bansal, Shri. Vayalar Ravi, Shri. Namo Narayan Meena, Shri. Harish Rawat, Shri. K.C.Venugopal for extending their support to NFIFWI.

My heartfelt thanks to the entire team of Trivandrum Division for their co-operation and unstinted support. The Kalvit Bhavan owned by Trivandrum division has been made available as our NFIFWI Headquarters for which we are indebted to Trivandrum Divisional Federation. I place on record the tremendous efforts of Com. Balagopal and his team in administering the website and upgrading it professionally. I also place on record the excellent work of Com. S.Sreekumar, Com. M.B.Vinod, Com. Hari.T.Pillai Com. V.Shibu, Com. B.Shibu and and their team in bringing out the News Bulletin regularly and in a very informative manner. I thank Com. J.Baburajan, Com. Sajillakrishnan, Com. K.R.Pramodkumar, Com. M.G.R.Nair for their support at all times. I also thank our office staff for their sincere and prompt work in the functioning of our Association Office.

It is this mighty army present here which motivates us and gives us the strength and confidence to carry out the responsibilities bestowed in us without fear or favour. My special word of appreciation to all the delegates and observers who have come here to make this Federal Council a gala event. You have again proved to one and all that we are United, Strong and loyal to NFIFWI. The increased number of delegates only proves their commitment and faith in NFIFWI. I convey my best wishes for a happy new year 2012 and the very best in life to each one of you and your families. In the course of discharging my duties as Secretary General in the best interest of our organization, may be some decisions would have hurt people individually or as a group unintentionally. I wish to express that everything was in the interest of our organization. I seek your pardon for all such acts if any. Organisation is supreme and let us all shred our petty differences and keep aside vested, selfish interests for the larger good of all. I thank each and every member of this mighty organization for having given the honour and opportunity to serve our National Federation.

Let us join hands and strengthen our National Federation which is our saviour and protector. Only a strong organization can help face difficult times, resist unfair policies and take on the challenges. Let us take NFIFWI to greater heights. Today we are 55 years old, let us prepare and march to celebrate the platinum and diamond jubilees of our beloved Federation.

Keep marching ahead, Victory will be ours UNITY IS OUR STRENGTH, KNOWLEDGE IS OUR POWER, SELFLESSNESS IS OUR QUALITY JUSTICE, DIGNITY AND MUTUAL RESPECT ARE OUR JUST DEMANDS National Federation Zindabad…..Long Live National Federation…..

Comradely Yours 41

R.Jayprakash Secretary General

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