Unscrupulous ‘agents’ are trying new ways to sell insurance products by peddling unauthorised schemes which have no approval from insurers

It looks like peddlers of snake oil are now focussing on insurance products. Local trains in Mumbai are plastered with advertisements of an ‘incredible’ deal being offered for selling life insurance products of a leading insurance company.

According to the advertisements, an agent who goes in for this scheme will have to work for two hours a day at two appointments a day, sell five policies a month—which would lead to 60 policies being sold in a year. For doing all this, the agent will get a commission of Rs6,000 per policy, amounting to Rs 3.6 lakh a year, claims the advertisement. What’s more, the ad also offers you a club membership and bonuses. All these advertisements are purported to be policies from Birla Sun Life Insurance.

Moneylife called up the number listed in the advertisement. Kishore Kamale answered our call and said that he could offer this correspondent the post of a ‘financial consultant’.

According to Mr Kamale, anyone seeking employment would have to undergo two days of training and then give an Insurance Regulatory and Development Authority (IRDA) certification exam, in order to get the license. Added to that, the potential ‘financial consultant’ would have to pay Rs800 to register for the exam and get the license.

Mr Kamale invited Moneylife to his office in Thane, (on the outskirts of Mumbai), and told us to bring along documents like 12th standard mark sheets, PAN card, a cancelled cheque, address proof and six passport size photographs.

Mr Kamale told us that he is offering 35% commission on premium for any insurance product sold (mainly traditional plans and Unit-linked Insurance Plans). ”From any of the insurance products you sell, you will get a commission of 35% on premiums,” Mr Kamale said. No mention was made of the club membership or bonuses.

A Birla Sun Life Insurance spokesperson we spoke to said that these schemes were not according to the company’s rules and regulations. When we told them about our conversation with Mr Kamale, the spokesperson said, “Our legal and compliance officer is already in action. He (Mr Kamale) is just misguiding somebody. We will be taking appropriate action against the person involved.” 

This is just one such example of how unscrupulous agents are going to town with fancy schemes which are expressly illegal and are openly duping the public.

Such schemes are proliferating. A few days back, an ‘agent’ started sending SMS messages to the public offering high returns on insurance schemes. The message (not corrected for grammar) said: “SBI Life: Just Pay Monthly Rs1,500 for 5 years, 20th year take Rs10 lakh Child Saving Pension Plan." 

When will these rackets stop?