We all know the tricky things drug companies do to influence doctors to prescribe their drugs to patients. In our latest investigation, we have uncovered a similar scam in the bancassurance sector.
The investigation exposes the pervasive scheme being run by insurance companies to influence bank employees to push insurance products – often unwanted – on bank customers.
We found evidence that insurance companies lure employees of banks with expensive gifts such as Apple products, foreign and domestic jaunts, and cash bribes to aggressively push insurance products, reveals an investigation by The Reporters’ Collective.
We got our hands on a cache of call recordings, video clips and internal communication of insurance agents with employees of multiple banks. They expose kickbacks and unethical incentives for driving the insurance sales being freely discussed, and senior bank officials egging on employees to achieve the targets.
These offers of kickbacks, payoffs and largesse clearly violated banks’ code of ethics and guidelines by insurance regulator that categorically forbid such rewards because it can lead to forced selling of insurance policies, frauds and jeopardise customers’ money.
India’s insurance market has been growing rapidly and is set to become one of the biggest in the world. Keen to ramp up their profits in this lucrative industry, insurance companies push their sales staff to achieve targets. A favourable bank manager or senior employee can help the agent leapfrog to his sales target. The investigation brings to light how these illegal financial incentives peddled by insurers lure bank employees to bend or break internal rules and code of ethics.
One such workaround in bankers’ kitty is to illegally and surreptitiously tap into the loan accounts of customers to add insurance premium, resulting in bounced EMIs and damaged credit score for customers.
There are other ways too: force bank customers to buy insurance as a mandatory add-on to a loan, locker facility, or to open an account. Banks have been accused of denying service to customers who don’t budge.
Click here to read the story by our Associate Member Hemant Gairola.