On Feb 3, Republica exposed Koteshwor based Momentowas using people without agent´s licenses to sell life insurance policies of National Life. Under the law only licensed agents are allowed to sell policies. [break]
During investigations, Momento was also found to be operating a pyramid scheme, promising individuals enrolled in it a return of up to Rs 60,000 each per month.
After the report was published, the Insurance Board started investigations. In the first phase, regulator sought written clarification from both Momento and National Life. Both the companies denied any wrongdoing. The investigation has since come to a grinding halt and Momento has been allowed to conduct its businesses as usual.
Dr Fatta Bahadur KC, chairman of the Board, told Republica: “It´s not that we have completely ignored the case. The investigation is still going on.”
“The investigations are on going, albeit a little slow as we have a lot of work and few people,” said other officials.
The data provided by the regulator show Momento had roped in 723 clients into the scheme ever since it acquired National Life corporate agent status about 11 months ago. In other words, Momento had sold 723 policies of the insurance company to various people. But when Republica posed as a client, Keshab Raj Sharma, an official of Momento, said it had enrolled 1,300 people in the scheme.
“The difference in the number of policies it sold has raised our eyebrows as the company may even be involved in selling duplicate policies to the public,” an official of the Board said on condition of anonymity. Even Bharat Basnet, CEO of National Life, during an interview with Republica two weeks ago, said such possibilities cannot be ruled out. “We are currently waiting for the Board´s verdict,” Basnet said.
Under the scheme launched by Momento, every new client first had to purchase a policy of National Life and sell at least two policies of the company to two different people. Each of the two new clients then had to recruit two other people to gradually create a pyramid. The main attraction of the scheme was that every new pair of clients who join the pyramid would automatically generate funds for people who had already joined the scheme.
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