This stricture would be applicable to both public and private insurance companies as well as general and life insurance firms.
According to IRDA sources, the authority will shortly ask insurance companies under its authority to collect the written undertakings from their regular and corporate agents.
After the Saradha bubble burst, it became apparent that several insurance agents, most of who were associated with the country’s biggest insurance firm Life Insurance Corporation of India, were doubling up as collection agents of different chit fund companies, including that of the tainted Saradha Group.
It was also evident that such incidences were rampant mainly in West Bengal, Assam, Bihar, Jharkhand and Orissa, where the activities of such ponzi schemes were the highest.
Last year, IRDA had cancelled Rose Valley Chain Marketing System Ltd’s licence as corporate agent licence of Life Insurance Corporation of India for violating terms and conditions of the licence and also for not abiding by specific provisions of the Insurance Act, 1938.
In fact, both the Securities and Exchange Board of India (Sebi) and the Serious Fraud Investigation Office (SFIO), the investigation arms of the Union ministry of corporate affairs, are conducting probe against different companies under the Rose Valley Group for their alleged involvement in ponzi activities.