Health policies by life insurance companies will not be portable

Your plan to switch your existing health insurance policy from a non-life insurer to a life insurance company may not be possible, at least for now. The insurance regulator is likely to confine the portability of health insurance policies to non-life insurance companies.

“To start with, only mediclaim policies offered by general insurance companies will be portable. Health insurance policies offered by life insurance companies, which are much more complex in nature, will not come under it,” said a senior official of the Insurance Regulatory and Development Authority (Irda).

One of the primary reasons for not extending the facility is that the term of the policies offered by general insurance companies is one year. However, for life insurance companies, it is long-term, raging between three and 15 years. Portability allows a policyholder to shift the policy offered by one insurer to the other, while keeping the terms and conditions of the cover unchanged.

“Most health plans offered by life insures are indemnity policies or benefit policies, which are associated with lump sum benefits at the end of the term, subject to certain pre-specified conditions. Hence, it is very difficult to port credits, since these policies require completely different underwriting techniques,” said a life insurance company official.

“More than 90 per cent of the health insurance business is confined to the general insurance industry. Policies offered by general insurers are fixed-benefit plans and are renewed annually. This is different from plans offered by the life insurance companies. So, portability between health products offered by life and non-life insurance companies is not feasible,” said a senior official at a state-owned general insurance company.

In short, for mediclaim policies, there are no survival benefits or life covers. So, general insurance companies would not be able to service these kinds of health insurance plans, he the official said.

Another aspect is the pricing of the policies. “One of the important issues is how to price the benefits. Different companies offer different benefits to add exclusivity to their products. For instance, in the case of portability, one has to forgo some benefits. Thus, the policyholder might claim some discount, which the insurer might not allow,” said an actuary in a life insurance company. Top Engineering Colleges

Last week, the insurance regulator decided to postpone the execution of portability of health insurance policies by three months to October 1, as industry officials sought more clarifications from the regulator.

In a bid to facilitate data sharing among insurance companies, Irda had embarked upon providing a web-based facility for insurers to feed in all relevant details on health insurance policies issued by them. This data would be accessible by the company to which a policyholder wishes to port his policy. “Such a system would enable the new insurer to obtain efficiently data on history of health insurance of the policyholder wishing to port. It is necessary to enable the smooth running of the system,” Irda had said.

Domestic workers now covered under health insurance scheme

There is good news for 47.50 lakh domestic workers in the country: they will now be entitled to health insurance cover under the Rashtriya Swasthya Bima Yojana (RSBY).

The extension of the medical insurance scheme, approved by the Union Cabinet here on Thursday, envisages smart card-based cashless health insurance cover of up to Rs. 30,000 under any empanelled hospital anywhere in the country.

The RSBY would be extended to registered domestic workers in the 18-59 age group, Union Information and Broadcasting Minister Ambika Soni told reporters after the Cabinet meeting. The majority of them were women.

Earlier this month, the Cabinet had approved extension of the scheme to 55 lakh beedi workers by 2013-14.

The funds for the scheme would be allocated from the National Social Security Fund for Unorganised Workers. The premium will be shared by the Central and State governments in the ratio on 75:25. In case of North East Region and J&K, the ratio will be 90:10.

The estimated expenditure to be borne by the Centre will be Rs. 29.70 crore in 2011-12, Rs. 74.25 crore in 2012-13, Rs. 148.50 crore in 2012-14 and Rs. 297 crore in 2014-15.

Domestic work form one of the largest sectors of female employment in the urban areas. Domestic workers are unorganised and the sector remains unregulated and unprotected by labour laws. These workers come from vulnerable communities and backward areas and most of them are illiterate, unskilled and do not understand the urban labour market.

The beneficiaries would have to get identification certificates from any two of the four institutions -- the employer, resident welfare associations, registered trade unions or the police, Labour and Employment Minister Mallikarjun Kharge said.

The upper limit of the annual contribution would be Rs. 750 per beneficiary — of which the Centre would bear Rs. 565 — and another Rs. 60 for the smart card, she said. A maximum of five members per family would be covered.

The Rashtriya Swasthya Bima Yojana provides for smart card based cashless health insurance cover of Rs. 30,000 annually to below poverty line (BPL) workers (a unit of five) in the unorganised sector and is being presently implemented in 25 States and Union Territories. The scheme has since been extended to building and other construction workers registered with the welfare boards constituted under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, street vendors, beedi workers and such Mahatma Gandhi National Rural Employment Guarantee Scheme who have worked for more than 15 days during the preceding year.

Asked whether a law would be brought to protect the rights of domestic helps as suggested by National Advisory Committee Chairperson Sonia Gandhi, Mr. Kharge said, "the issue [of making a law] came up recently. As of today, we are extending the benefits of an existing programme to domestic workers".

Mr. Kharge said a task force, constituted in December 2009, had recommended among other things the extension of RSBY to domestic workers.

The extension of the scheme would not only provide them insurance benefits, but also help in preventing their exploitation, Ms. Soni said. It would also lead to registration of workers and placement agencies.

General insurance IPO norms on way

The insurance regulator will come out with a separate set of guidelines for general insurance (non-life) companies that are looking to tap the capital market with initial public offerings. The regulator is waiting for Sebi’s recommendations on the disclosure requirements.

According to R.K. Nair, member (finance and investment) of the IRDA, the disclosure requirement for non-life insurance companies will be different from those of life insurance firms given the nature of cash flows and risks underwritten by them.

“We are awaiting the recommendations of SCODA (Sebi Committee on Disclosures and Accounting Standards) which is still working on the disclosure requirements for non-life insurance companies. Once we get these recommendations, we’ll come out with the IPO guidelines,” Nair said on the sidelines of an insurance summit of the Indian Chamber of Commerce here today.

He declined to give any time frame for releasing the guidelines.

Early this week, the Insurance Regulatory and Development Authority (IRDA) unveiled draft IPO guidelines for life insurance companies. In the draft, the requirement that an IPO applicant should be profit-making has been replaced by the condition that the embedded value of a life insurer must be twice the paid-up equity capital of the company. The embedded value is the value of all in-force policies plus the net worth of a life insurance company.

Norms for common TPA may be ready in 3 months

The proposed regulations for common Third Party Administrator (TPA) to check excess mediclaim bills by private hospitals is expected to be ready in the next three months. Accordingly, a common TPA is expected to help insurance companies control both health insurance premiums and claims.

Last year, the four general insurers namely National Insurance Company, New India Assurance, Oriental Insurance and United India Insurance had decided to set up a common TPA as a joint venture to manage health insurance claims. Concerned about over-billing, the insurers had even barred about 150 private hospitals from the list of preferred provider network (PPN) offering cashless medical facility. But, later the services were resumed by some providers after a dialogue between the hospital administrators and the insurance regulator, Insurance Regulatory and Development Authority (Irda).

‘‘With the formation of a common TPA, the health insurance business will come together and we will be able to negotiate better with service providers. We hope that it should be ready in the next three months,’’ G Srinivasan, CMD, United India Insurance Ltd, said. He was in the city here for signing an MoU with State Bank of Hyderabad (SBH) to provide free personal accident insurance to provide ‘‘group Janata personal accident insurance coverage’’ to all individual operative savings bank account holders of the bank.

Typically, TPAs are companies to which insurers outsource servicing of health insurance claims. They are approved and regulated by Irda and undertake a majority of the back office work including networking with healthcare providers after the insurance company issues a policy. They charge about 5% of the premium as fee to process a policy. Over 27 TPAs are so far registered with Irda....

LIC Jeevan Arogya – In Good Health medical cover for your parents

Escalating medical expenses are a cause for concern not only for the elderly, but also for those in their middle age. As health awareness increases not just regular insurance companies, but life insurance companies too are coming up with new health policies.

LIC has recently launched Jeevan Arogya, a non-linked health insurance plan that provides health insurance cover against specified health risks, with benefits such as daily hospital cash benefits, major surgical benefits and day care procedure to meet medical emergencies. In the event of any major illness suffered by the insured, the plan allows waiver of premium for the subsequent one year.

WHAT'S ON OFFER

* Guaranteed coverage for the policyholder up to the age of 80 and his family including parents and parents-in-law against medical expenses incurred due to hospitalisation.

* Financial protection in case of hospitalisation and surgery

* Automatic increases in cash benefits every year at 5 per cent

* Fixed benefits to the individual irrespective of the cost incurred

* No-claim benefit of five per cent, for three claim-free years

* Flexible premium payment options with rebates and discounts for higher premium

* Sum insured increases by 5 per cent a year, to the maximum limit of 1.5 times of the initial sum insured.

* Fixed premium for first three years, irrespective of the claims. Age at entry is the base for all future premiums till the policy is in force.

* Riders such as term insurance and accident benefit. The overall cover under the plan inclusive of the two riders is Rs 10 lakh.

* Tax benefits under section 80D available for all health insurance.

HOW IT WORKS

Individuals can choose the amount of daily hospital cash benefit (HCB) as per their estimated requirements. The plan allows a minimum of Rs 1,000 per day and maximum of Rs 4,000 per day to cover the daily cost of hospitalisation. For instance, for a family of six with parents above 70 and principal insured at 40 for a sum insured of Rs 2 lakh each the premium will works out to a maximum of Rs 31,502(before any rebate).

Daily hospital cash benefit: If the principal insured or any of the persons covered under the policy are hospitalised due to accident or sickness and stay in hospital for more than 24 hours in non-ICU ward an amount equal to HCB will be paid for 30 days in the first year and 90 days from the second year. In the event they stay in an ICU an amount equal to twice the HCB will be paid for 15 days in the first year and 45 days from the second year. This will be within the overall limit for each year.

Major Surgical Benefits (MSB): 100 times of the HCB or applicable daily benefit with an increase by five per cent from the second year onwards. For instance, if the HCB is Rs 2,000 in the first year, it will increase by five per cent to Rs 2,100 (daily cash benefit) from the second year onwards. MSB benefit will be available for minors also. The total number of surgeries covered under the plan is 140. The sum insured is payable based on the categorisation of surgery and it varies from 40-100 per cent.

Day Care Procedure (DCP): In the event of the insured undergoing for any of the 140 day care procedures LIC has specified, the amount paid will be equal to five times of the daily benefit and it will be allowed three times a year and 24 times for whole of the policy.

Other surgical procedures: In the event of the insured undergoing surgery not listed under the above options, and is hospitalised for more than 24 hours then two times the daily cash benefit will be paid for 15 days in the first year and 45 days in the subsequent years.

Quick cash facility: An advance of 50 per cent of the major surgical amount will be paid to the insured for the specified surgeries. To avail the benefit insured has to inform the LIC or the facilitator for the claims. After the latter processes the request LIC credits the eligible amount to the policyholder's bank accounts.

OUR TAKE

With health insurance plans netting large losses for general insurance companies, they have imposed many restrictions on insuring older family members. Hikes in premia too have been steep. Individuals finding it difficult to include their parents/parents in-law in their existing policies may find this plan suitable to their needs. However, LIC Jeevan Arogya has a cap on entry age at 75.

You should also note that a health policy offered by life insurance companies can only supplement health policies offered by general insurers. The health policies are an indemnity plan - the hospital expenses are reimbursed up to a maximum sum insured without any limitation. The health cover offered by life insurers are benefit plans and the cover is restricted by various conditions.

The advantage under the Jeevan Arogya is that pre-existing diseases are covered after two years, against the usual four-year waiting period . However, the premia during the initial years are higher compared to the top-up plans offered by the general insurer. But an individual signing up for this plan at an early age has the potential to save on premium later .

This plan is ideal for self-employed professionals, people with a family history of critical illness and for those above 65 who do not have a medical cover.

Health insurance scheme for beedi workers a poll device

The general secretary of Gondia CPI and district president of AITUC Hauslal Rahangdale flayed State government's health insurance scheme for beedi workers in the district as a gimmick in view of the coming municipal elections in Gondia and Tiroda.

The government had in a recent notification included Gondia in a list of 21 districts which have been selected for the health insurance scheme for beedi workers. The insurance cover is of Rs 30,000 on payment of a principal amount of Rs 30 per year. The criterion for the scheme is that the workers should come under the BPL category and also the insurance will cover only five members of the family. Government has asked the district administration to issue smart cards for this purpose. The work for which is going on war footing according to the staff of the hospitals earmarked for the scheme. Approximately 50 thousand such cards are to be readied by June 30.

Houslal Rahangdale said that when National Health Insurance Scheme for those under BPL category already exists in the state since 2008, the propriety of a new scheme only for beedi workers is totally unnecessary and the motive behind the move is questionable.

He said that according to a government circular dated August 27, 2010 the information about such workers is supposed to be collected by the insurance company appointed by the Nodal Officer. So the move to deploy the staff of the government beedi workers hospitals for this work is a mystery. As per information the Nodal Officer had appointed Tata AIG Insurance Company for this propose but according to local labour officer one MD India Insurance Company is doing this work on behalf of Tata and it appears to have passed this work on to the medical officers due to political pressure, Rahangdale said.

After studying all these aspects Rahangdale asked, why the government did not come out with a simple package of Rs 30 thousand for a family which becomes member of this insurance scheme or work towards providing additional facilities to the existing hospitals for the beedi workers from the funds which will be collected from the beedi workers. Rahangdale pointed out that the whole scheme is eyewash and demanded enquiry into this scheme.

ICICI Lombard associates with Air India Express

ICICI Lombard is collaborating with Air India Express to provide travel insurance solutions to overseas and domestic travellers. This would enable customers to take advantage of Group Travel Insurance (Overseas) for a period as short as 15 days or their return to India, whichever is earlier.

The policy covers customers travelling abroad against possible risks and situations such as medical expenses caused by hospitalisation arising out of accidents, loss from trip delay, loss or delay of checked-in baggage, loss of passport, etc. Talking about the tie up, Neelesh Garg, executive director, ICICI Lombard General Insurance said, “Our partnership with Air India Express brings together a comprehensive, cost effective travel insurance cover at the time of ticket purchase along with the ease of instant online policy issuance. The product coverage has been carefully designed to meet the needs of Air India Express’ guests and has a convenient claims settlement process.“ The company has also tied up with Europ Assistance, a leading global assistance provider to provide hassle free claim settlement.

Tata AIG General Insurance wins awards at Indian Insurance Awards

At an awards ceremony organized by India Insurance Review, Tata AIG General Insurance bagged 2 prestigious awards, 1 each in the health and general insurance category.

India Insurance Review and Celent presented the India Insurance Awards 2011 - the awards were presented to the Indian insurance industry in a glittering ceremony held at the Intercontinental Hotel in Mumbai this evening.

The jury consisted of Mr S B Mathur, Secretary General, Life Insurance Council; Mr S L Mohan, Secretary General, General Insurance Council; and Mr Vepa Kamesam, Managing Director, Institute of Insurance and Risk Management (jointly promoted by IRDA and AP Government).

Tata AIG General Insurance Company (TAGIC) was awarded the Company of the Year Award 2011 for Health Insurance and Best Product Innovation Award 2011 in the general insurance category for the year 2010 – 2011.

TAGIC was awarded the Company of the Year Award 2011 for Health Insurance segment during the Indian Insurance Awards. This award was to recognize the company that stood out amongst its peers in terms of Revenue growth, Profitability, Innovation & Customer service.

Mr.Gaurav Garg, MD of Tata AIG General Insurance Company said “The award reinforces our perception as a strong health insurance company as evidenced also by the HT MaRs Customer Satisfaction Survey (results published in March, 2011) which ranked us as No.1 in customer service satisfaction and No.2 in claims settlement satisfaction. This perception is likely to be buttressed by our imminent entry into the mediclaim space as we await IRDA’s approval for the Mediprime product. It is a testament to our wide and strong product range of benefit based secondary medical insurance products that have not only delivered a profitable business line but also awards from the industry and a high degree of customer satisfaction. Our dominating presence in the Overseas Travel Insurance which is perceived as an Overseas Mediclaim also contributes in no small bit to our position.”

Tata AIG’s current health insurance portfolio consists of the following products

Wellsurance (Executive, Family and Woman version) – A comprehensive, fixed benefit hospitalization, surgical and critical illness plan that offers guaranteed insurability at renewal for whole life.

Accident and Sickness Hospitalization Cash Plan – pays a fixed daily hospitalization cash benefit based on number of days of hospitalization

CritiCare – Pays a fixed lumpsum benefit in the event of diagnosis of any of the select critical illnesses.

TAGIC was also recognized with the Best Product Innovation award amongst General Insurance players in the Indian Insurance Awards. The recognition was for Private Client Group Home secure Policy that was launched in August 2009. It is a unique product catering exclusively to the High Net Worth client’s need of insuring their high value possessions such as paintings, valuables, work of art, jewelry, collectibles etc. It offers packaged cover for the entire home contents including above items with first in the market covers such as hole in one expenses, loss in value for fine art, pairs and sets, etc.

Additional services are offered along with the insurance cover e.g vulnerability assessments, transit supervision, conservation and storage assistance.

Tata AIG General Insurance Company provides insurance solutions to individuals and corporates. It offers a complete range of general insurance products including insurance for automobile, home, personal accident, travel, energy, marine, property and casualty as well as several specialized financial lines. Tata AIG believes in offering innovative and relevant insurance solutions in the retail and commercial space. Each product offering is backed by expertise and an unparalleled claims service.

Tata AIG’s products are available through various channels of distribution like agents, brokers, banks (through bancassurance tie ups) and direct channels like Tele Marketing, Digital Marketing, worksite management etc. Tata AIG has its operations in 59 cities.