Sucheta Dalal :Insurance broking firm offers astronomical rewards under MLM scheme
Sucheta Dalal

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Insurance broking firm offers astronomical rewards under MLM scheme   

May 6, 2010

 Jeevan Suraksha Medicare Services Ltd, an insurance broker agency based in Gujarat, is yet another company engaging in chain-marketing insurance products—an activity discouraged by insurance regulator Insurance Regulatory and Development Authority (IRDA) and prohibited under the Insurance Act, 1938.

Section (41) of the Insurance Act, 1938, clearly states that “a licensed agent, whether individual or corporate, can’t appoint a sub-agent and pass on a commission to another person or entity. Any passing of commission by an agent is construed as rebating and is prohibited under the Act.”

Despite the law being in place, corporate and insurance brokers of various insurance companies are openly running such schemes.

Countries like Sri Lanka, Australia, Nepal and China have already abolished all kinds of chain-marketing schemes.
IFCO-TOKYO, ING Vysya Life Insurance and Shriram Life are some of the associate companies of Jeevan Suraksha. The company claims to have more than 17,000 agents working for it.

“Our company recruits insurance agents. After taking the agency license you can start selling general and life insurance policies. You don’t have to give any test. If you take our agency then you have to work for one month to accumulate 1,000 ‘Jeevan Value’ points. After that we recruit you,” said an associate from Jeevan Suraksha.


Moneylife had earlier reported on how insurance products are being mis-sold by corporate agents under chain-marketing models. (Read here: ,, )

According to recent media reports, a public interest litigation (PIL) was also filed in the Allahabad High Court against IRDA alleging mis-selling of Unit-Linked Insurance Plans (ULIPs) and insurance companies which encouraged the network marketing model.

To become an agent of Jeevan Suraksha, one has to buy a personal accident policy of Oriental Insurance Co Ltd by paying Rs450 premium for a three-year cover. The sum assured is Rs5 lakh.

The budding associate (agent) has to sell 25 personal accident policies of Oriental Insurance in order to become a ‘Jeevan Associate’ for which he gets 1,000 Jeevan Value (JV) points. This is the first stage to qualify for becoming a Jeevan Associate agent. The associate gets 20% commission on 10,000 JV points (1JV point=Rs10) at the entry level. The second stage is ‘Jeevan Earth’ in which the agent gets 5% commission on 20,000 JV points and a Parker pen as a reward. The rewards for the successive stages are a mug set (Jeevan Moon), executive bag (Jeevan Venus), wrist watch (Jeevan Mars), laptop (Jeevan Pluto), Bajaj Pulsar bike (Jeevan Quasar), Maruti SX4 (Jeevan Star), Honda Civic (Jeevan Sun), to name just a few stages. If the associate reaches the last stage, i.e., ‘Jeevan Sun’ he can get a maximum of Rs51,000 as pension per month, as long as the business keeps coming in.

The company proclaims that the criteria for becoming a ‘Jeevan Associate’ is that an individual has to be 18 years of age, possess a PAN card, enjoy Indian citizenship and should be mentally sound.

Jeevan Suraksha deals in life insurance, general insurance and mutual funds. Bajaj Allianz Family Assure II, Future Saral Anand, LIC Jeevan Saral, Met Growth Super, Nagrik Suraksha Policy and Mediclaim Floater 180/365 are some of the insurance policies on offer.

Email queries sent to the concerned companies and Jeevan Suraksha remained unanswered till the time of writing this report.

When asked about what training would be provided for peddling insurance products, the co-ordinator said that all our doubts “will be cleared” in associate meetings held across Mumbai. These meetings actually train you on how to sell insurance products and convince prospects by luring them with rewards.
Moneylife has been repeatedly bringing such instances to IRDA’s notice but the authorities seem to be turning a blind eye to this issue. — Ravi Samalad


-- Sucheta Dalal