Investor Issues
Here’s another company that’s openly flouting IRDA norms on prohibition of chain marketing of insurance products

You have to hand it to this company. The name itself—Rose Valley Chain Marketing System Ltd—makes it clear that the outfit is neck-deep in multi-level marketing schemes. And insurance is part of its arsenal.

The company, certified by the Insurance Regulatory & Development Authority (IRDA) is a corporate agent of the Life Insurance Corporation of India (LIC) since 2002 and has six lakh foot soldiers pushing various insurance policies across India.

Moneylife had reported earlier ( on how according to Section (42) of the Insurance Act, 1938, appointing sub-agents and passing on commission or kickbacks is prohibited. When we had approached the insurance regulator on the proliferation of various MLM insurance schemes, along with the details, IRDA's executive director A Giridhar had told Moneylife, “Selling insurance through unlicensed persons is illegal and we will act on the information provided by you.” In addition, IRDA certification is mandatory for selling insurance products.

But here is an example of a company that does not even find it necessary to cloak its insurance MLM business—its name itself is a dead giveaway.
The model operates as follows—a sales executive has to achieve a target of Rs40,000 within 12 months. This is the joining stage. At the 18th rank, a sales executive ‘graduates’ to become a ‘Development Advisor Group 3’.
The products being peddled include LIC policies, along with fixed deposits and recurring deposits of Rose Valley.

A sales executive does not have to pass an IRDA examination, says an official from the company, which is in express violation of the rules.

The official from Rose Valley said, “Once you reach a certain level, you don’t have to work any more; you can earn commission bought by your chain.”
The brochure also says that a ‘marketing executive’ can also recruit a maximum of 15 sales executives.

At the first stage, the annual target is Rs40,000 and at the final stage (the 18th rank) the target is Rs20 crore. This target also includes the business achieved from the lower chain(s).

The group is a huge conglomerate with its finger in many pies. It has interests in real estate, hospitality, retail, broadcasting and IT education & training.
According to the company official, the group is also looking at entering the housing finance loan segment.



Prof. Bajaj

6 years ago

IRDA ?? Does something of that name exists ??

IRDA Norms ?? Are they supposed to be followed. Come on, someone must be kidding with you.

The way IRDA has been working, I dont even believe in its existence, forget about its functioning. IRDA reminds me of "Dhritarashtra" who is blind and helpless to stop the Duryodhans (Insurance Companies) and Dushasans (So called Corporate agents) from exploiting investors.

Hope this article of Moneylife acts as Lord Krishna.


6 years ago

Just like this Amway is also selling Life Insurance Products thru its MLM/Direct Selling Distributors, under brand name of Amsure (visit: Notably the products giving highest Points are being sold by distributors regardless of customer needs. I met one such advisor recently but he was totally ignorant about basics of investing, insurance & ULIPs
How about this ??
Will irda take action against this ?


6 years ago

Not only Rose Valley but many other such Coporate Chanells of Reliance Life Insurance, Birla SunLife, Bajaj Allianz are running similar schemes in metros and in rural India without any intimidation. Reliance Life Insurance has created a new hierarchy to look after this thriving business. Even Global players like AMWAY has entered this MLM insurance business. All IRDA and Life Insurance companies are lending a deaf ear to such complaints as every body wants to mintain status quo.

Dillip kumar swain

6 years ago

Dear ML,
You are writing/scouting aginst illigal things for indian citizen.GOOD.I request u pl. go another step.i.e. PLI.

Nikhil Ghosh

6 years ago

I wish Moneylife could have brought to the IRDA notice few month back, as all the Insurance as well as MLM companies collected huge amount by silling ULIPs.. I do hope the IRDA the regulators will take some action atleast..
I wish to CONGRATULATE Monelife

Pintu Das

6 years ago

Hats off to Moneylife, do provide more details to IRDA as they may not be aware off, whats going on and how the policy holder get fooled.


6 years ago

This is not the new one nowadays many company as been selling the insurance policies by way of MLM only for example TLC who selling BAJAJ ALLIANZE POLICIES , AMWAY who selling MAX NEW YORK POLICY and ROYAL SUNDARAM MEDICLAIM POLICY and there are many more companys which have not come out.

Tapas Chakraborty

6 years ago

Great Work and kudos to Moneylife for unearthing this group which has its roots in Kolkata and has many of its business interests in West Bengal. This organisation has revolutionised the art of Insurance selling. It claims in many of its Advertisements that it is the largest "Corporate Agent" of LIC and uses the LIC logo in all its branch Signage. In fact the fixed Deposits are also Shams and they have raised crores of Rupees. Their success has inspired many a dubious business entities to take up similar business models in Bengal. Please take up the issue and highlight the ineffectiveness of the regulators

NHAI board clears Rs6,500 crore road projects

The projects comprise construction and upgradation of highways in eight states, including Haryana, Uttar Pradesh, Andhra Pradesh and Bihar

The National Highways Authority of India board on Monday cleared eight road projects worth Rs6,500 crore for construction and upgradation of highways in eight states, including Haryana, Uttar Pradesh, Andhra Pradesh and Bihar, reports PTI.

"The projects cleared by the NHAI board include six- laning of 179 km of the Delhi-Agra section on National Highway No. 2 in Haryana and Uttar Pradesh," a road ministry official said.

"The construction of the Delhi-Agra section will entail an investment of Rs1,928.22 crore and will be built under the National Highways Development Project (NHDP) phase V on a build, operate and transfer (BOT) basis," the official added.

The board, comprising road secretary Brahm Dutt and NHAI chairman Brijeshwar Singh, among others, agreed on a concession period of 26 years for the project.

The board also approved six-laning of a 183 km section of National Highway No 5 in Andhra Pradesh at an expenditure of Rs 1,535 crore.

The other projects are in the states of Bihar, Orissa, Maharashtra, Madhya Pradesh and Chhattisgarh.


Bank of Rajasthan to merge with ICICI Bank

BoR plunged into a crisis early this year after the RBI slapped a Rs25-lakh fine on the bank for alleged violation of various norms

Trouble-torn Bank of Rajasthan (BoR) today announced that it would merge with India's largest private sector lender ICICI Bank, reports PTI.

An agreement for amalgamation was reached today between ICICI Bank and BoR, which as per today's share price is valued at Rs1,500 crore.

BoR shares surged 20% to Rs99.50 following the development.

Bank of Rajasthan said in a notification to the stock exchanges that its controlling shareholders, the Tayal family, "have entered into an agreement on 18 May 2010, with the ICICI Bank for proposing an amalgamation of both."

BoR promoters, the Tayal family had recently run into regulatory trouble with the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) over its stake holding, which had risen contrary to the impression it conveyed.

The Tayal family has about 55% stake and it needs to bring it down to 10% to meet RBI guidelines.

The boards of both the banks met today on the merger.

BoR, one of the oldest private sector banks in the country, plunged into a crisis early this year after the RBI slapped a Rs25-lakh fine on the bank for alleged violation of various norms.

These include irregularities in transactions and misrepresentation of documents, norms pertaining to anti-money laundering, Know Your Customer (KYC) and irregularities in the conduct of accounts of a corporate group.

RBI also appointed Deloitte Haskins and Sells to conduct a special audit of the bank, which recently submitted its interim report to the central bank.

In March, SEBI banned 100 entities including Tayal Group firms from all stock market-related activities for fraudulently hiking the promoter holding in the bank, while conveying the impression that they were reducing their shareholding.

Incepted in 1943, BoR has a network of over 463 branches and a customer-base of over 20 lakh. In the December quarter, the bank's net profit declined to Rs44.7 crore as against Rs49.21 crore in the year-ago period while its total income dropped to Rs373.7 crore from Rs419.8 crore.

ICICI Bank has a network of over 2,000 branches.




6 years ago

its very bed when any out country bank is taking over our countries bank and also RBI aproved for it so it is so chep feeling that stiil wher v r going. better u marge the bank with any indian bank after all indian has some value in international market. so please dont do this type of mareging wher u harting to ur family.
thank you and please dont do this thing.

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