Insurers flout norms, use pyramid selling schemes
Pyramid schemes, where recruiting more sellers is more important than selling, aren’t new in India. An investigation by ‘Outlook Money’ magazine, the content partner for Mint’s personal finance coverage in the Business of Life section, reveals that such schemes are now being used by corporate insurance agents -- in violation of norms laid down by the Irda
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Dear editor sahib, this type of pyramid selling, though banned in India, has flourished and the regulator is not at all concerned about it. I, a dvelopmentofficer of LIC, and many of my colleagues have been voicing our concerns through our forum to the regulator, but it has proved futile and may be this system has procured some few crores in premium but at whose cost? It is killing the professional agency system, the accountability of the individual agent, and efficient servicing system for the policyholders, the products marketed by PYRAMID system eats away 70% to 80% of the premium as allocation charges, but when democracy prevails over the ethics who cares? At least now IRDA should seriously try to regulate these things instead just being a silent watcher
ARUNACHALAM