Legitimate agent runs MLM scheme under a murky cover
Moneylife Digital Team 16 April 2010

Team Life Care Co, an authorised corporate agent of Bajaj Allianz Life Insurance, is carrying on a multi-level marketing scheme under a sister entity called TLC Insurance (India) Pvt Ltd, in open violation of the law

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.”

1 decade ago
As per irda referal is allowed
Prafulla Pandit
Replied to VENKATRAMAN comment 1 decade ago
Thanks Mr. Venkatraman, I searched about it and yes referrel is allowed. Then it means Unique Mercantile India Pvt. ltd. is not doing anything wrong. I was very worried as my relatives had invested money in it, now I m not tensed. Thanks

Prafulla Pandit
1 decade ago
Hello Sirs,

I have come across one more such company involved in MLM and soliciting inurance through people who not have any license to do such insurance solicitation, the company had spread its hands over Boisar and Thana and Gujrat Area

Name of the Company is Unique Mercantile India Private Limited, they sell insurance product of MAx Newyork Life. I had sent a email to Max people but no proper reply received. The Company is located in Gujrat acting as Corporate Agent of Maxlife. Further IRDA circular of 14-7-2005 says that to appoint a company as Corporate Agent it has to be Public limited co. with 15 lac paid up capital, whereas this company is private limited company.
1 decade ago
TLC UNIVERSAL ditributing irda approved insurance policies of Bajaj Allianz and all customers are advised to take dd infavour of BA. All coordinators are trained in tlc meeting which are conducted most part of the states on regular interval. If an agent of BA distributing same policy why cant Tlc?
Mohindar Rathod B S
1 decade ago
Please Contact me
ak sharma
Replied to Mohindar Rathod B S comment 1 decade ago
A survey company under police raid at Varanasi

1 decade ago
i think you (Moneylife) is jelous about TLC
Replied to Mubashir comment 1 decade ago
Are you joking?
1 decade ago

From IRDA website http://www.irdaindia.org/: (Insurance Regulatory and development authority)

To protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto.

The mission of IRDA is to protect the intestes of policyholders and regulates the insurance industry.
It also checks the liabilities of Insurance industries regularly every 3months so as to protect the interests
of policy holders.

Duties, Powers and Functions of IRDA:

from its website:

Section 14 of IRDA Act, 1999 laysdown the duties,powers and functions of IRDA..(1) Subject to the provisions of this Act and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business.
(2) Without prejudice to the generality of the provisions contained in sub-section (1), the powers and functions of the Authority shall include, -
(a) issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration;
(b) protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance;
(c) specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents;
(d) specifying the code of conduct for surveyors and loss assessors;
(e) promoting efficiency in the conduct of insurance business;
(f) promoting and regulating professional organisations connected with the insurance and re-insurance business;
(g) levying fees and other charges for carrying out the purposes of this Act;
(h) calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organisations connected with the insurance business;
(i) control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938);
(j) specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries;
(k) regulating investment of funds by insurance companies;
(l) regulating maintenance of margin of solvency;
(m) adjudication of disputes between insurers and intermediaries or insurance intermediaries;
(n) supervising the functioning of the Tariff Advisory Committee;
(o) specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organisations referred to in clause (f);
(p) specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector; and
(q) exercising such other powers as may be prescribed

From the above (b) clearly says that it make sure all hte policy holders gets their claims/returns.

In general when you take an Insurance policy from an Agent its not the responsibilty
of Agent to give you claim its the responsibility of Insurance company to settle the claim and if at all
there is a problem in Insurance Company IRDA make sure Policy holders getting their claim as mentioned above.

Going by above If you take an insurance policy from Agent/CorporateAgent/Channel Partner(in this case Team life care) it doesn't matter
ultimately its the Insurance company or IRDA will take care of the policy holders claims. so I don't see any harm in taking insurance policy from any source.

Please do let me know if my understanding is incorrect.

You may go through IRDA website to understand more on the security given for the policy holders by Govt (IRDA).
1 decade ago

Can any body clarify on this...

If I took policy from Bajaj Allianz through TLC , in future due to any legal issue between TLC and Bajaj Allianz or IRDA will IRDA or Bajaj Allianz cancel my Insurance policy or not?

1 decade ago

Its unclear to me how referring vs selling the product comes under same category.

All Direct Marketing Industry doing business through referral system and in principle no one is allowed to sell any product if they do not have any license. (be it insurance or any other product). Please make a note of referral vs selling.

My views on Insurance:
o Insurance is generating lot of money to govt and helping in country economic growth (courtesy: recent FM talk during FirstIndia Insurance company launch)
and its possible that IRDA/Govt is keeping quiet on these. but I hope there one day there will be act on this.

Right now in India ~20% people covered with Insurance and I hope by the time we reach 100% there will be a act on controlling on Direct Marketting :-)

Please note that all corporate agents of most of the insurance companies doing referral marketing in insurance sector (including LIC as well).


At the end:
o Insurance sector is getting returns
o Govt is getting returns
o Investors getting their policies

I am trying to understand where the customer is losing...

Could you enlighten me on this?

1 decade ago

First of all you are comparing MLM system with Products Vs Insurance. You have to understand the importance of doing Insurance. If you buy a product you can use & through. Where as insurance is a bound time between Insurance company & People who want to insure their lives. Insurance who are promoting those should have certified from IRDA or some other Corporate Agent. Agent should have some basic knowledge on some insurance terms like Rick Cover, Death Benefit.

Let’s comes to this TLC topic

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.”

From this point TLC insurance (India) Ltd is no right to do any insurance business for Bajaj Allianz, even tho it is a sister company of Team Life Care Co (India ) Ltd, those managed by a common boss. My simple question is that as MLM system which is running in TLC is legal, Y they are not running through Team Life Care (India) Ltd.

Let’s Comes to Business model

I don’t encourage this type of Business model in Insurance sector. Because the people who joins this system is mainly because of earning money by simple referring only TWO people concept & building the chain. Here every thing will go into wrong. He is not getting any training from TLC. He will see only for first time installment of premium and he don’t bother for remaining terms. In some point of time he does not know who are joining under him & he can’t monitor & don’t know where it will go but he will get money. If you are not working & you are not putting your efforts but getting more and more money. Can you name what type of money you are getting? And it is clearly showing TLC is distributing money to their unauthorized coordinators truly they are not eligible. And you are attracting people in the system for earning easy money it seems to be immoral & don’t say that we are encouraging people for insurance. If you are really encouraging people to do insurance just do the Certification from IRDA & act as Agent, take care of people who join under you & also get benefit from your services. I have gone through their commission details and also comparing the commission which you are getting in the System & as a Agent.

No of Points No of Policies Premium Benefit TLC commission to a Coordinator As individual Agent Commission
1000 200 10000 Tour Achiever 60000 600000
3500 700 10000 Car 210000 2100000

And you are encouraging people for insurance only, just think How much money you are losing for you great efforts in building the chain to this much long. So I am feeling the people who encourage this system, they will see only for easy money.

Some point of time this chain will go to the villages & they will pay the first premium. The coordinator who encouraged this system is busy in building his chain & his work is over & getting commission. After that the village insurancer who entered into this system does not know how to pay his renewal premium, does not know how to claim if some thing happens. These will Leeds to lapsation of his policy & he won’t get any money. So here for improving Coordinator business he is doing some immoral business.

This is where all private insurance companies are losing business & LIC is gaining. In other business all the private Companies are best & but in Insurance state owned company (LIC) is leading & next to that is SBI Life (in terms of profits).

Finally finishing that if you join this system you are working for TLC insurance (India) Ltd which is running MLM system not for Team Life Care (India) Ltd (Original Channel partner of Bajaj Allianz)

Hope IRDA will take proper action on this type of MLM system in the Insurance sector.

vino TLC
Replied to Eswar comment 1 decade ago
i never accept your point of views about this business.. i think u r insurance agent.. TLC have more then 7,000 workers and more then 120 branches over all india... the company can manage the renewal premium.
1 decade ago
There is no problem in direct marketing or selling any product and earning money provided that you are not being fooled by creazy dreams, such as earning huge income, living in luxury. My objection is for the methods used for these kind of selling. I have to become participant and join below someone and then have to fool minimum two people so as to earn 'commission' and if thes two people can fool other two each, then I will get more money. Then there are the pairs and balance you have to maintain in your downline failing to which you will not get anything. This kind of modus operandi never really works for anyone except for the people who start such schemes.
1 decade ago
First of all my thanks to MoneyLife for doing this research and publishing this article.

I've few questions/comments to add about this. I am naive in the marketing field and do not have much
exposure so please excuse me if I spoke something wrong.


MLM is a Direct Marketing concept and I think this is one of the best marketing model in the world that can grab more market value in a short span of time as customer is made brand ambassador to mouth market the product. And the results are evident witnessed through company's results.

In this marketing model, instead of spending money on product advertisments through celebrities and icons this make use of customers and uses mouth marketing through customers. Since the customer is referring the product to people and that inturn making the business to company what is wrong in he(customer) getting the advertisement cost benefits.

In the market big celebrities are getting crores of rupees just by appearing in product advertising for few seconds on the electronic/print media and what is wrong in customer getting these benefits (very very small amount when compared to celebrity brand ambassador)?

IMHO, the advertisement costs are given to the customer instead employing a brand ambassador for the company and paying/spending crores of rupees in ads.

I think Direct marketing has roots in Eastern side of the world and has biggest potentinal in the marketing arena thats witnessed and is growing in India.

1978 Money Circulation and Prize Chits Act:
According to the above law, anything that comes under "easy and quick money" and products saled at higher price than the market value. I've looked at the legal sections of various companies and opinions of the judges they say that these businesses are not coming under this.

Insurance and TLC:
Team Life Care Company Pvt Ltd is a No.1 channel partner of Bajaja Allianz group selling Insurance products through Referral marketing scheme under TLC Insurance India Pvt Ltd.

I've read through IRDA regulations and it says

o There should not be any service charge collected for Insurance policies that agents sell
o Corporate Agents shouldn't distribute the commision that they get to sub-agents
o Agents should have necessary qualification to sell the Insurance policy.

In this case Team Life Care Company (A channel partner) is doing its business through TLC Insurance India Pvt Ltd through Direct Marketing and inturn giving part of the commission to its co-ordinators.

Going by the Direct Marketing Concept:
o Co-ordinators are the customers and doing mouth marketing and inturn getting advertisement/commission benefits of Insurance policies.
o No service charge is collected on the Product
o To become a co-ordinator in TLC one needs to pay 500Rs for his documents, promotional kit, life time login and maintenance charges in TLC.

Open questions:

o Money circulation and Prize Chit act is introduced in 1978 and I don't understand why the companies were given permission to register as per 1956 Companies Act to do this kind of business and still there lot of companies in India doing this kind of MLM business
o Is Direct Marketing is encouraged in India and what is right/wrong in this type of marketing?
o What is the functionality of Channel partners and rules and regulations that Channel partners follow? I think IRDA might have more details on this.

1 decade ago
To clarify:

TLC Insurance India Pvt Ltd and Team Life Care Co are sister companies, one is operating the insurance business with referral marketing model and whereas the other is yes the mirror entity but is engaged into the other businesses as well. Further to that, Team Life Care is the No.1 Channel Partner and not a corporate agent of Bajaj Allianz Life Insurance company according to http://www.bajajallianzlife.co.in/channel-partners.asp

Regardless of the bad fame of so many MLMs, this model clicks because the insurance is bound to have some value whereas the other MLMs that include selling of perishable consumer products do not have value after usage whereas the insurance premiums are like savings after maturity so this model clicks. What is wrong if this model runs and I do believe that when IRDA has itself approved the license for TLC insurance India, and with the fast-paced growth and benefits from the referral marketing model, the insurance awareness as well as the the number of lives that are covered is reaching above target levels or more than expected. So why not?
I would not associate with this business myself if there is not any scope(potential) nor a legitimate business model nor any money circulation involved.
TLC being channel partner, is distributing the commission to the sales force network that it has got, strictly based on their labour so I find no money circulation involved in this business. MLMs are banned/not encouraged for the very same reason that they involve money circulation.

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?

I do encourage this article seeing the light of the day and bringing more awareness to the revolutionary campaign and more-so-ever, the harmonious benefits that it brings to the society today. I wish and request you guys to please continue your research and update all of us readers on this news item.

1 decade ago
Thank you for your clarification. Hope Government / IDRA will take necessary actions to stop these type of Bussiness especially in insurance sector,
1 decade ago
Tapas Chakraborty
1 decade ago
There are numerous other such schemes running across the length and breadth of the country... But our regulator for the sector (or are they promoters??) are not aware of them.
It is really great that you have taken up this big task on investor awareness
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