Prohibition
of cessation of payments of commission
44. (1)
Notwithstanding anything to the contrary contained in any contract between any
person and an insurance agent providing for the forfeiture or stoppage of
payment of renewal commission to such insurance agent, no such person shall, in
respect of life insurance business transacted in India refuse payment to an
insurance agent of commission due to him on renewal premium under the agreement
by reason only of the termination of his agreement, except for fraud:
Provided that-
(a) such agent ceases to act for
the insurer concerned after the Central Government has notified in the official
Gazette that it is satisfied that the circumstances in which the said insurer
is placed are such as to justify the agent's ceasing to act for him; or
(b) such agent has served the
insurer continually and exclusively in respect of life insurance business for
at least five years and policies assuring a total sum of not less than fifty
thousand rupees effected through him for the insurer were in force on a date
one year before his ceasing to act as such agent for the insurer, and that the
commission on renewal premiums due to him does not exceed four per cent in any
case; or
(c) such agent has served the insurer continually
and exclusively for at least ten years and after his ceasing to act as such
agent he does not directly or indirectly solicit or procure insurance business
for any other person.
Explanation.—For the purpose of this sub‑section, service of an insurance agent
under a chief agent of the insurer, whether before or after the commencement of
the Insurance (Amendment) Act, 1950 (47 of 1950), shall be deemed to be service
under the insurer.
(2) Any commission payable to an insurance agent under the
provisions of clause (b) and (c) of the proviso to sub‑section (1) shall,
notwithstanding the death of the agent, continue to be payable to
his heirs for so long as such commission would have been payable had such
insurance agent been alive.
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