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 (http://www.moneylife.in/article/8/5371.html) 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.