Prohibition of payment by way of commission or otherwise for procuring business
40. [(1) No person shall pay or contract to pay any remuneration or reward whether by way of commission or otherwise for soliciting or procuring insurance business in Bangladesh to any person except an insurance agent or an employer of agent.]
(1A) [Omitted by section 3 and the Second Schedule of the Bangladesh Laws (Revision And Declaration) Act, 1973
(Act No. VIII of 1973).]
[(1B) No person shall pay and no insurance agent shall receive any renewal commission in respect of a life insurance business after the expiry of licence during the validity of which such business was procured by the insurance agent unless such licence has been renewed under sub-section (4) of section 42.
Explanation.- For the purposes of this sub-section all the life insurance business to the credit of an insurance agent as at the date of the expiry of his licence, shall be deemed to have been procured by the insurance agent while holding the licence valid on the said date.]
(2) No insurance agent shall be paid or contract to be paid by way of commission or as remuneration [in any form an amount exceeding, in the case of life insurance business,] forty per cent of the first year's premium payable on any policy or policies effected through him and five per cent of a renewal premium payable on such a policy, [or, in the case of business of any other class, fifteen per cent] of the premium:
Provided that insurers, in respect of [life insurance policy only,] may pay, during the first ten years of their business, to their insurance agents fifty-five per cent of the first year's premium payable on any policy or policies effected through them and six per cent of the renewal premiums payable on such policies.
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[(2A) Save as hereinafter provided, no insurance agent shall be paid or contract to be paid by way of commission or as remuneration in any form any amount in respect of any policy not effected through him:
Provided that where a policy of life insurance has lapsed, and it cannot, under the terms and conditions applicable to it be revived without further medical examination of the person whose life was insured thereby, an insurer, after giving by notice in writing, to the insurance agent through whom the policy was effected if such agent continues to be an agent of the insurer, an opportunity to effect the revival of the policy within a time specified in the notice, being not less than one month from the date of the receipt by him of the notice, may pay to another insurance agent who effects the revival of the policy an amount calculated at a rate not exceeding the rate of commission at which the agent through whom the policy was effected would have been paid had the policy not lapsed, on the sum payable on revival of the policy on account of arrear premiums (excluding any interest on such arrear premiums) and also on the subsequent renewal premiums payable on the policy.]
(3) Nothing in this section shall prevent the payment under any contract existing prior to the 27th day of January, 1937, of gratuities or renewal commission to any person, whether an insurance agent within the meaning of this Act or not, or to his representatives after his decease in respect of insurance business effected through him before the said date.