Clarification on Payment of PLI/RPLI Incentives to Divisional Heads 2024: Unlocking Opportunities for Growth

Clarification on payment of PLI/RPLI incentives to Divisional Heads

Clarification on payment of PLI/RPLI incentives to Divisional Heads: PLI and RPLI are part of the India Post offerings and have covered millions in urban and rural areas with safe life insurance coverage. To boost growth within these schemes, giving incentives on a performance basis is allowed to the divisional heads of India Post. But doubts on entitlement for incentive refund have left many confused, hence the need for directives.

It is addressing the persistent concerns on the payment of PLI/RPLI incentives to the divisional heads besides getting clarifications from the divisions all around the country.

Current Position: PLI/RPLI Incentive Payment

According to the guidelines issued by the Directorate of Postal Life Insurance under File No. 28-03/2019-LI dated 11.07.2023, an incentive of 0.3% is payable to the divisional heads on all new business procured by the respective divisions of sales personnel, that is, Development Executives (DE), Field Officers (FO), Gramin Dak Sevaks (GDS), and Departmental Assistants (DA).

There are, nevertheless, questions on implementation of those guidelines in distinct situations where incentives bills accumulate and take ages in being processed and paid.

Key Issues Requiring Clarification

The eligibility and incentive payment to the divisional heads have some remaining unsolved critical points:

1. Transfer In Policy Period

Scenario: A divisional head procures PLI/RPLI policies during the first six months of a policy year and later transferred to another division.

Question Raised:

• Is the officer eligible to receive awards for the last six months from the parent division where the policies were initially sourced?
• The divisional head can claim incentives from both the parent and transferred divisions or only from the transferred division?

Impact: Lacking clarity, incentives may not be properly calculated; thus, there could be a risk to officers’ motivation towards achieving business targets.

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2. Superannuation of Divisional Heads:

Scenario: A divisional head retires after bringing in new business premiums during his period.

Question Raised: Indeed, the retired officer is eligible for incentives on the collected premiums for the first 12 months of the policy period.

Impact: Many of the retired officials possess such benefits in their financial planning. Thereby, the retiring manpower may thus develop resentment and the whole process may not be clean.

3. Congestion of Several Units

Scenario: A divisional head accepts one extra charge of many divisions for a long time or a short period.

Questions Asked:

• Can the officer submit incentives for both divisions during the period of additional charge?
• If the new charge was held for a minimal number of weeks, say one week or more, would the officer qualify for the incentive payments at this juncture?

Outcome: This is the most common scenario, resulting from short-term variations in staffing. It is time for a policy standardization regarding incentive payouts.

Problems when Handling Reward Payments

The confusion associated with the above events created major operational bottlenecks:

1. Delayed Payments: Incentive bills have been withheld across divisions, affecting the morale of divisional heads.

2. Administrative Burden: The many clarifications sought from the higher offices brought about inefficiencies and miscommunication between the divisions and the Directorate.

3. Inconsistency in the application: There was no standard policy set that led to interpretation discrepancies in eligibility criteria by different departments.

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Communication between Offices

The circle office replied to the query sent earlier by the divisional office through Letter No. NKR/PLI/305-II/2023-2024, dated 13.03.2024 wherein acknowledgement receipt was obtained through email on 15.04.2024 stating that the matter was already referred to the Directorate, and till today no follow-up clarification has reached this end.

This delay has been confusing the heads of divisions and has come in the way of processing their incentive payments. Time and again, the divisions have requested solutions to these matters so that financial operations are streamlined.

Implications for Divisional Heads on Clarification on payment of PLI/RPLI incentives

Payment of incentives has so far only represented recognition of the divisional heads’ efforts and dedication in terms of business growth for PLI and RPLI schemes. In case there is unresolved ambiguity in the payment process, it will lead to:

1. Demotivation: Divisional heads may lose interest in actively promoting PLI and RPLI policies without the assurance of timely incentives.

2. Financial Security: Lack of punctual payment of incentives brings on financial constraint more specifically to retired officers and even temporarily in-charge officers.

3. Policy Performance Impact: Divided heads’ lack of motivation might retard overall growth in PLI and RPLI, which may negatively affect the insurance penetration into India Post’s performance targets.

Urgent Need for Resolution

To address these pressing issues, it is essential for the Directorate to provide clear and detailed guidelines on the following:

1. Transfer Situations: Determine whether incentives should be granted to the parent or transferred division, or both, in case a division’s head is transferred in mid-policy period.

2. Eligibility For Retirement: Establish standard policy on incentive payment to retired officers for business generated during their tenure under consideration.

3. Surcharge for Short Periods: Establish selection criteria to merit officers working in surcharges on short-term basis with dismissible fairness.

Further, there should be a regular channel of communication between divisions and circle offices and the Directorate in order to avoid delay in decisions.

Recommendations : Clarification on payment of PLI/RPLI incentives to Divisional Heads

1. Policy Amendment: The Directorate has to review the guidelines existent under File No. 28-03/2019-LI and to issue a circular dealing with the issue contemplated above more comprehensively.

2. Technology Integration: Leverage Finacle or other digital platforms to streamline incentive calculations and reduce manual errors.

3. Awareness Sessions: The company conducts workshops and training sessions with the divisional heads to ensure uniform understanding of eligibility criteria for incentives.

4. Effective Communication: Set up timelines to resolve questions and share clarifications with all departments.

Conclusion: Clarification on payment of PLI/RPLI incentives to Divisional Heads

Payment of PLI/RPLI incentives to divisional heads has been an important linkage in motivating the workforce by India Post for business growth toward life insurance schemes. However, at times, an unclear conception led to operational problems that adversely impacted the efficiency of payment of incentives.

Thus, the Directorate can ensure transparency, consistency and fairness of incentive payment if these issues are treated in time and adequate guidance. It will reinforce the confidence of divisional heads and brighten the prospects of PLI/RPLI schemes, and then India Post shall be a strong contender to provide reliable insurance services.

To know the latest updates along with the official circulars on Payment of PLI/RPLI incentives, keep visiting PostalCorner.in for authentic news from all around India Post.