The right of heirs to receive the commission on renewal
premium does not arise under any law of succession and it is a right directly
conferred on heirs by Section 44(2) [of the Insurance Act, 1938]. But the
statute which conferred such right is competent to provide exception in certain
cases and take away such right. The proviso has taken away this right of heirs
in the event of the Agent making nomination in favour of a particular person
(B.M.Mundukur v.LIC(1977) 47Com Cas 19) [Quoted from The Insurance Act, 1938
together with Legislative history, comments and case law, 1986 published by
Eastern Book Company]
In other words, in Agency, the nominee becomes owner of the
hereditary commission (whereas in a policy nominee has no right on policy
moneys).
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