Wednesday, May 30, 2012

Premium Rates For Group Health Cover To Go Up

The government has been watching the financial health of 4 PSU’s (General Insurance Companies ) and has told them they should not offer heavy or aggressive discount on group health policy which is a loss making portfolio . This is an attempt to stem losses of close to Rs 1,500 crore, which these companies have incurred during year ending March 2012.

The move could lead to a higher premium on such policies.

The finance ministry has told generalinsurance companies to revise the premium upwards or stop renewing group health insurance policies to prune their losses, said a finance ministry official. The combined ratio--- claims paid plus other expenses as a percentage of premium earned--- is close to 150% now. The combined loss of state-run firms, mainly on account of such discounts on policies, is estimated to be close to Rs 1,500 crore for FY12. This has prompted the government, the owner of these companies, to issue the directive to cut losses.

It has been noticed that Public sector companies are giving huge discounts to grab market share. So our efforts will be to bring discipline to the group health insurance segment. There should be an audit of individual portfolios so as to ensure that segment-wise there is no loss,” said the official.

What we can expect in near future is:

a) Control on Costs will be brought –use of generic medicines vs branded medicines ,sub limits within the policy ,use of PPN hospitals
b) Non coverage of parents
c) Concept of Co payment may be @ 20%. We foresee this will become a common feature in 2012- 2013

Rupee Depreciation Vs US $ to result is increase in Overseas Travel Insurance Premium

We did not realise when the Rupee was depreciating Vs US $ that it will result in increase in Overseas TravelInsurance Premium. It has really put pressure on the travel insurance portfolio of leading general insurance players and they are having no option but to go to the regulator--- Insurance Regulatory Development Authority (IRDA) --- to refile and restructure the premium charges of their products soon.

According to spoke person of HDFC Ergo, there is definitely a possibility to revise premiums. “Since almost all claims in travel insurance are denominated in foreign currency, the claim amounts are going up as the rupee depreciates. If the depreciating trend continues, premiums will   be revised upwards.”

If you are traveling frequently –it will be worthwhile for you to buy Annual Multi Trip Policy.

Friday, May 25, 2012

Illegible handwriting has bothered us while lodging health insurance claims.

It is surprising to know that. Doctors’ illegible writing causes 7,000 deaths in the US every year. Individuals lodging health insurance claims have been facing lot of difficulty in reading prescription/diseases/diagnosis while filing or lodging up claim forms.

Now the change is coming – as a movement has now begun to ask doctors to write prescriptions in “separate, capital letters”. Brainchild of NGO Forum for Enhancement of Quality in Healthcare and the Quality Council of India (a semi-government organization accrediting services), its first meeting in Mumbai last week was attended by medical associations and NGOs.

This move will be welcomed by all those who were finding difficulty in reading prescription/diseases/diagnosis.

Should the officer of claim department pay penalty of Rs.15, 000?

A district consumer forum has ordered New India Assurance Co. Ltd. in May 2012 to pay a policy-holder Rs.60, 000 for refusing to reimburse expenses incurred on hospitalization.

Shiv Kumar Gupta had spent Rs.45, 252 on his son’s hospital stay in 2010. The district consumer disputes redressal forum has ordered the company to reimburse the amount and also pay Rs.10, 000 as compensation for “harassment’ and “mental agony” and Rs.5, 000 as litigation cost.
The insurance company refused to pay claim by taking stand that Gupta had not provided all documents. Gupta informed the third party administrator of the company of his son’s hospitalization on December 7, 2010 and had submitted all the documents. He was told his claim was being processed. The company later rejected it arguing that doctor’s prescription slip and IPD paper were missing.

“Despite the fact that the insurance company has received the policy premium when the benefits were required to be extended to the complaint / family members it closed the claim without valid reason,” said the forum. Therefore judgement was passed for payment of Rs.60, 000

The Question before us is

“Should the officer of claim department or the branch manager be asked to pay penalty of Rs.15, 000 out of his salary?

Why should the company be penalized for payment of Rs.15, 000?

Comments are invited.

General & Life Insurance Companies to pay for Accident death due to mosquito bite under accident insurance/life insurance

Consumer Forum in 2012 has decided that mosquito bite is an accident and therefore is covered under accident death insurance.

The forum judgement is, “In our opinion, when a snake bites a person, it’s an accident. We do not find any difference between the death caused by a snake bite and the death caused by the bite of malaria parasite,” They further directed Oriental Insurance Company to reimburse a man’s claim whose father had died of malaria.

Oriental Insurance had earlier rejected the claim, saying the policy was in respect to sustaining ‘bodily injury’ resulting from accident and since the insured did not die of any accident, the man was not entitled to the insured amount.

Let us see what are the implications or this judgment.

In our country large numbers of people take Accident / Double Accident rider while buying Life   Insurance with this judgement- in case any one dies with malaria then his/her nominee will be in a position to lodge additional claim under the head of this rider (accident-double accident).

We welcome this decision of Consumer Forum.

This fact should be widely circulated by all of you among friends/relations for the benefit of society.

Thursday, May 24, 2012

Swiss Re may buy 26% in proposed L&T Health Insurance JV

There are indications that Larsen & Toubro General Insurance Company Ltd. will form full fledged 100% HealthInsurance Company to focus on Health Insurance. It is a good idea as worldwide Health Insurance is treated a specialized area and 100% Health Insurance focused insurance companies are in operation.

We understand from news report that L&T Health Insurance Company will be a joint venture with Swiss Re and 26% equity partner.

In case every thing goes well L&T Health Insurance will be 5th stand alone health insurance company after Star/ Apollo/ Max Bupa & Religare.

Saturday, May 19, 2012

Indian Health Insurance Market- 2011-12

Indian Health Insurance Market- 2011-12

Actual figure of Indian Health Insurance Market for the year ending March 31, 2012 are now available and according to it this market has touched figure of Rs.13345 Crores. The estimates of segment wise figure are :
Group Corporate portfolio and Group Government portfolio (may be Schemes like RSBY,) continue to be a loss making portfolio. Retail portfolio continues to be the group where insurance companies have been successful in reducing the claims figures by following rigid norms. May be the decision of PSU’s to go in for strictness i.e. July 1, 2010 and strengthening of PPN has resulted in good results.

Indications are that State Governments will not increase ( as it was happening 2 years back )their budget for schemes / subsidy. As on now ( May 2012 )Andhra Government has not released cheque of Rs.300 crores towards one of its policy due to shortage of funds. We do hope austerity measures proposed by Ministry of Finance do not affect the growth of this sector.