Peddlers of multi-level marketing (MLM) schemes in insurance products are coming up with new ways to cover up their shady activities. One such company is Team Life Care Co India Pvt Ltd, a corporate agent of Bajaj Allianz Life Insurance Company Ltd.

Team Life Care Co (India) has a website (see here) in which it lists down all the Bajaj Allianz products that it sells. However, Team Life Care Co (India) seems to be running a mirror website in a company called TLC Insurance (India) Pvt Ltd (see here) where it lists down an elaborate and bizarre MLM scheme.

Section (41) of the Insurance Act (1938), clearly says 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.”

Moneylife contacted both Team Life Care Co and TLC Insurance (India) Pvt Ltd. Soumya Nair from Team Life Care Co confirmed that TLC Insurance (India) Pvt Ltd was an outfit that it was running. Saurabh Dahayat from TLC Insurance (India) Pvt Ltd also confirmed that it was a part of Team Life Care Co. Both Ms Nair and Mr Dahayat confirmed that both these entities share a common managing director, one Mr Jagannath (initials or first name not available).

When Moneylife contacted Mr Dahayat from TLC on how the MLM scheme operates and the relationship between the two entities, he said, “Team Life Care is an operations department of TLC where you get a login ID and all your queries are cleared. You have to draw a demand draft (DD) on the name of TLC Insurance. You have to issue one DD in favour of Bajaj Allianz and the other for TLC Insurance (India) Pvt Ltd. Both companies are a part of one group. Our managing director is (the) same. You have to work for TLC Insurance (for the MLM scheme).”

Here is a clear case of a company which is running a legitimate insurance agent business, but which has a mirror entity which is engaging in an MLM insurance scheme, expressly prohibited under the Insurance Act.

If you take a look at the websites of both these companies, you would notice that they carry a common logo (see above links).

Santosh Balan, head, (Corporate Communications) from Bajaj Allianz sent us this email: “We wish to inform you that Team Life Care Co (India) Ltd is a Corporate Agent of Bajaj Allianz Life Insurance and they solicit business through approved specified persons only. All our agents are strictly advised to follow all regulations and procedures while soliciting business. If we find anyone violating any norm or regulations, we would take strict action against them.”

However, Mr Balan also added, “The two entities mentioned in your mail are distinct and are two different companies.”

The question is, why is Team Life Care Co operating an MLM scheme through another entity (TLC Insurance (India) Pvt Ltd)? As we mentioned earlier, both companies have confirmed to us (over the telephone) that they are related to each other and share a common managing director.

What's more, the entity running the MLM scheme, TLC Insurance (India) Pvt Ltd, has a number of 'testimonials' in its website which point to various court orders and attestations from legal luminaries confirming that the MLM scheme that it is running is a legitimate business.

Moneylife is not in a position to confirm the legitimacy (or otherwise) of these various court orders and testimonials that TLC Insurance (India) is carrying on its website.   

But if MLM schemes are expressly prohibited under the Act, how can a company run such a scheme under such a guise?

When we contacted the regulator, the Insurance Regulatory and Development Authority, an official told Moneylife (on conditions of anonymity), “Only licensed individuals (are) allowed at the point of sale, and sharing of commission is not allowed.” — Moneylife Digital Team