There was an amazing news item now. Mr. D Swaroop said Rs. 15,000 crores was paid as commission to the insurance distributors, so they have decided to eliminate commissions. Fantastic idea, should be immediately implemented!
Vow! So the investors save Rs. 15,000 crores.
A quick calculation showed that the insurance companies paid Rs. 22,000 crores as rent, Rs. 4,000 crores on food and beverages, Rs. 10,000 crores on electricity….etc.
So it has been decided that insurance companies cannot use agents (no commissions), no electricity (electricity will be saved), and there will be no tea or coffee provided in life insurance companies. All landlords will have to give the premises free to the insurance companies (out of love for the industry!).
One CXO of a big life insurance company said “the way I know, LI cannot work!” Of course they are being very considerate in 2010 you can be paid 15% commission…then 7.5% and nil in 2011!
Do they even realise that out of Rs. 15,000 crores – a huge part would have been paid as salaries (by banks), as rebates (by many of the agents and some banks – oops it is illegal), some paid as rent, for petrol, for clerical salaries, telephone charges, advertising…etc. The way Mr. Swaroop said Rs. 15,000 crores (btw there are about 30 lakh agents atleast, so on an equitable basis the per capita income is Rs. 5o,000 per year!) he felt like he has unearthed the next Scam!
As a typical government agency is somebody trying to force people to sell NPS? Another lousy government program…Er You thought i said NPS is good, correct? Will write about horribly priced annuity in a later post.
Swaroop committee, swarup ‘no comission’ ‘zero load’ ‘no commission on life insurance sales’
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