Stop Insurance Co discounting of premium by Direct Marketing, IRDA keep competition Fair. Sign this petition and share on Wtsapp Groups and Facebook NOW!
Prakash Mahtani
Sign this petition and share on Wtsapp Groups and Facebook NOW!" and wanted to see if you could help by adding your name.
Our goal is to reach 100 signatures and we need more support. You can read more and sign the petition here:
The Problem
In the past couple of years, a few insurance companies have aggressively started direct marketing or B2C initiatives by tapping into the existing large client databases. The direct marketing team of such companies are offering the same products generally marketed by millions of insurance agents, brokers and other Intermediaries, but at “discounted premiums". This practice is affecting the livelihood and competitiveness of agents, brokers and other intermediaries ("Agents"), since obviously clients are lured to purchase a policy at a “discounted premiums". Should the Agents be subject to this unethical and unfair business practice, so that large corporations can try to increase their profit margins ?
Section 41(1) in The Insurance Act, 1938 does not permit the offering of any rebate on the commission payable or any rebate of the premium shown on the policy. The insurance company's direct marketing initiative of offering policies at a “discounted premium" is nothing but a rebate in disguise.
It may be argued that the company may have got approval from IRDA to “discount premiums” for direct clients but this would defeat the very purpose and intent of Section 41 which essentially does not permit rebating/discounting of premium.
Further, an Agent and a direct market employee as such have the same relationship with an insurance company, although the manner of compensation differs. The difference, as I understand, is that the direct marketing employee gets a fixed salary ranging from Rs.2.50 - 10 lacs per annum plus incentives, rewards and recognition, while an Agent does not get the benefits of a fixed salary and is purely dependent on variable commission, incentives and reward recognition. Therefore, it is rather intriguing how this unfair predatory pricing strategy is permitted, if a policy is purchased from the direct marketing employee vis-a-vis an Agent.
I strongly believe that this unethical and unfair business practice, will lead to unhealthy competition and may hurt the insurance industry in the near future. IRDA needs to urgently address this issue of “discount pricing”, which if continued to be permitted, would affect the livelihood and competitiveness of more than 2.2 million Agents, brokers and other intermediaries, who have been the back bone in past and will be instrumental to the growth of the Insurance Industry in future.
Way Forward :- IRDA must regulate the published prospectuses or tables rates of the insurer at fixed rates for direct marketing teams, Agents and all intermediaries. The clients are free to choose direct marketing or Agents based on their quality of advice and services. We are very much for competition but it must be fair and on a level playing field.
We must collectively urge IRDA to stop insurance companies from discounting of premiums and predatory pricing strategy, so that Agents and all intermediaries can focus on increasing the insurance penetration in India rather than fight a failing battle with an Insurance company's direct marketing team based on price.
I have decided to protest against the "discount pricing" strategy by wearing a Black Tie to work everyday, I request you to do the same or at least wear a Black Ribbon or arm band everyday or at official meetings and functions as sign of peaceful protest against this unfair and unethical business practice adopted by Insurance companies.
Objective: The objective is to stop the unfair competition, predatory pricing strategy and prevent mass unemployment amongst 2.2 million + Agents. This petition is not intended to be against any particular insurance company but is only against the unethical and unfair insurance industry business practice of “Discount Pricing”. If you still have questions on this issue please feel free to call/wtsapp me at 9892219020 or email p...@eldora.in, I will be happy to hear from you.
I request you to Sign this petition and forward to others on Wtsapp groups and like comment share on Facebook, so that we can together mobilise a large number of Agents to garner strong support to stop “discount pricing” by Insurance companies with the help of IRDA.
I sincerely thank you for your kind attention and support.
Prakash Mahtani
Cell 9892219020
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