QUOTE OF THE WEEK

“In any moment of decision, the best

thing you can do is the right thing, the next best thing is the wrong

thing, and the worst thing you can do is nothing.“

Theodore Roosevelt

INSIDE THE ISSUE

Insurance Industry Life Insurance General Insurance Health Insurance Motor Insurance Crop Insurance Survey Insurance cases IRDAI Circular Global News

INSUNEWS Weekly e-Newsletter

20th – 26th April 2019

Issue No. 2019/17

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INSURANCE TERM FOR THE WEEK

Rider

A rider is a term meant to denote an add-on provision to a basic life insurance policy that provides additional benefits to the policyholder at an additional cost. A rider can be added only at the time of taking the policy. This is one way to customise your life insurance policy to suit your specific needs and maximise your benefits.

There are a host of riders that are provided by life insurance companies. Some of the most popular riders are accidental death and permanent disability rider. In these, if an accident results in death or permanent disability of the person insured, then, coupled with the promised benefit, an additional sum is also paid to the insured.

The advantage of opting for a rider is that you gain from the convenience of managing just one policy in addition to paying the same premium amount as in the case of a standalone policy.

However, note that the benefits of a rider policy will accrue only till the base policy is in force.

INSURANCE INDUSTRY

Term Insurance Plans with Return of Premium: Best for people looking for investment element in life insurance – Financial Express – 24th April 2019

The uncertainty and unpredictability of events in life are enough reasons for one to buy a life insurance policy. Life insurance, apart from protecting your family from the unexpected financial disasters due to instances such as accidents and critical illnesses, gives them a financial stability from the eventuality of death of the bread winner. Essentially, life insurance is there to give your dependents financial protection if you die, usually as a lump sum or staggered payout depending upon your specific needs and requirements.

With the significant economic growth, the incomes of people may have gone up multiple times but the expenses have also shown a sudden splurge due to discretionary spending. In addition, increased liabilities and dependents have also forced people to invest in term plans as the usual profile of people seeking such a cover is that they either have kids or liabilities like unpaid debts. Most importantly, a term plan is the only kind of insurance policy that you need to have because it gives you the maximum cover for the lowest cost. Moreover, now you can buy term insurance even till the age of 99+ years which was not possible to do till a few years back.

Term Insurance with Return of Premium A popular concept under term insurance, Return of Premium (ROP) insurance means all the premiums are returned to the insured as maturity benefit. The product promises to work out great for everyone looking for guaranteed cash value while buying an insurance plan. As a policy seeker, you can select the term period that matches your specific needs and requirements. Indians as customers expect at least some return from life insurance policies and it can be from the capital at least. For investors more concerned about return, ROP is a value-for-money policy.

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Term of Policy As an investor, you can decide on the term or duration as per your financial situation. Generally, the policy is available for 20, 25, 30 and 40 years. For instance, you can buy a 20-year term life plan if you have a 20-year loan to repay and unfortunately if something happens to you within the term, you won’t have to worry about the repayment of the loan. And in case you outlive the term, you will get back 100% of your premium invested.

Benefits on Maturity The maturity or survival benefits for a Return of Premium plan are quite different from that of a traditional term policy. Under a ROP plan, the insured is paid back the premium for the number of years insured. Under many plans, the insurer even pays more than the premium paid provided certain conditions are met by the insured. Also, the entire maturity amount received by the insured remains tax free.

Payment of Premium For convenience of the customers, insurers have introduced various premium payment plans that offer great flexibility. You can now choose a payment option that best suits your financial situation. The standard premium payment options available in the market include Annual, Semi-Annual, Quarterly and Monthly. Some of the insurers even provide a single premium payment option wherein you can pay the premium for the entire term in one go.

The following is a comparative table of 5 leading insurance companies offering Return of Premium term insurance with Rs 1 crore sums assured for a non-smoker, 30-year-old man who earns between Rs 7 to Rs 10 lakh annually. The cover is up to 65 years of age.

(By Santosh Agarwal, Chief Business Officer- Life Insurance, Policybazaar.com)

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Wondering how much term insurance would be sufficient for you? It depends on your lifestyle – Financial Express – 22nd April 2019

The motive of taking a term insurance plan is to cover the risk of early death during one’s working life. So, the cover should be sufficient to replace the earning of your remaining earning life in case of unfortunate death as well as to create sufficient corpus for your dependents to survive the post working life after paying back all the outstanding liabilities.

Although, as a thumb rule, it is said that the term cover should be at least 8 to 10 times of your annual income, but your

existing assets and liabilities will also have a say on how less or more cover you need. So, your lifestyle plays an important role in choosing the quantum of term cover.

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In case you lead a lavish lifestyle by overspending through EMIs on luxury top-end products, which you really don’t need, you create unnecessary liabilities by putting even future earnings at stake, which push your earning obligations up and the requirement of higher term cover as well. Because, in case of any unfortunate eventuality, your dependents will not only have to maintain the normal standard of living out of the income string generated by investing the sum assured, but also need to repay the liabilities that have been left behind as your legacy.

However, you may not get that much extra cover, as the eligibility to get maximum cover is decided on the basis of actual earning of a person and not on the basis of overspending through EMIs. So, if you are enjoying a lavish lifestyle by going beyond your source of income, your dependents may have to suffer and downgrade their standard of living to prepay your liabilities in your absence.

On the other hand, if you lead a controlled lifestyle and spend on items that you need, you may be able to save substantial money. This will not only relieve you from taking that extra life cover, but a judicious investment of the money you save will actually reduce the requirement of the term cover. Because, in case of any unfortunate adversity, your dependents would not have any liabilities to repay and the savings on the other hand would boost their earnings apart from the source of earning generated by investing the sum assured.

(The writer is Amitava Chakraborty.) TOP

Online insurance aggregators make claims settlement easy - The Hindu Business Line – 19th April 2019

Millions of people today buy insurance policies, including term life insurance, health insurance, motor insurance, and travel insurance; however, in many cases, policyholders are let down by the insurance provider at the time of claims settlement, negating the very reason for buying the policies.

Online insurance aggregators and brokers are offering insurance claims settlement services not only to their customers but also to others confronted with multiple

issues in getting their claims processed and settled.

Insurance aggregator platform Insure Mile says India’s 220-million policyholders can download the free app on their smartphones to update, renew, or cancel policies and, more importantly, file claims and check claims status. Insure Mile went live last month, and has partnered with 24 leading insurance companies to offer more than 200 products across general and life insurance sectors.

Similarly, insurance broker IndianMoneyInsurance.com, a subsidiary of Bengaluru-based IndianMoney.com Group, which also went live last month, has opened up its platform to assist policyholders in India with free claims settlement services.

“Once the insurance salesman sells a policy to you, he is not reachable after that. However, if you do manage to reach him after several attempts, he will ask you to contact the insurance firm for assistance.

“Recent data reveal that currently in India Rs. 11,000 crore of premiums is unclaimed due to the complex process of reaching out across multiple touch points. Insure Mile is addressing this challenge by providing free policy services for all existing policies issued by insurance firms,” said Mallesh Reddy, co-founder and CEO, Insure Mile.

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According to the IRDAI, 1.1-crore policies worth Rs. 15,617 crore are lying unclaimed with 23 life insurers as on March 31, 2018. The amount has remained unclaimed beyond six months from the due date for settlement of the claim amount.

The question one must ask before buying an insurance policy is if the money will reach the nominee if anything goes wrong, said CS Sudheer, founder CEO IndianMoney.com Group. “In most cases, the nominees are not aware of the policyholder’s insurance plans or whereabouts of the policy documents, resulting in unclaimed amounts piling up with insurers, and family members not receiving the money they badly need,” said Sudheer.

To make beneficiaries aware of policy documents and the claim process, Indian Money Insurance ensures that the proposal form is filled by the policyholder. Then a letter is sent to the nominee, telling him/her about the insurance plan, claim amount, and claim settlement process to make sure the money reaches the nominee.

(The writer is Sangeetha Chengappa.) TOP

LIFE INSURANCE

Providing adequate life insurance cover and annuity plans should be vision statement of insurers – Financial Express – 26th April 2019

The vision statement of a company describes where the organization or the company wants to be by fulfilling its mission. The vision involves the customers or the community or even the entire society which is expected to experience a transformation shift to such level of product and service experience which is the most desired or the ultimate stage in an organization’s life. If Microsoft’s vision is “a computer on every desk and in every home”, the life insurance industry should visualize financial protection to all in India.

A mission statement invariably follows the vision statement for describing the ground level actions and the immediate and long term objectives for realizing the vision. Vision is the end result while mission is the route to travel till vision is realized. The insurance regulator in India, IRDAI, however, does not articulate its vision though the regulatory body has made a seven point mission statement. Hence at the regulator’s level obviously there is no clarity regarding the ultimate state of development of the industry if the entire role it envisions for itself is played effectively.

Vision of LIC Now let us see what the insurers ultimately look forward to. The LIC of India’s vision is to be “a trans-nationally competitive financial conglomerate of significance to societies and pride of India”. LIC does not envision a future when every Indian will have at least one life insurance policy on his/her life. To realize its vision LIC’s mission is “to ensure and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns and by rendering resources for economic development”.

Vision of private insurers Now let us see what the insurers who have entered the market following liberalization have to say. “To be the most trusted and preferred life insurance provider” is the vision of the SBI Life which is among the top three private life insurers in the country.

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The company’s mission comprises of “offering a comprehensive range of life insurance and pension products at competitive prices…” Insuring all the eligible people of India is therefore not the vision of the SBI Life which has the advantage of having largest network of offices across the country. SBI does possess the logistics required to reach out to a potential life insurance policyholders in any part of the country through SBI’s vast branch network.

The vision of ICICI Prulife Insurance is “to build an enduring institution that serves the protection and long term saving needs of the customers with sensitivity”. The company has not made any specific statement about mission but desires to realize its vision through five goal values viz: Integrity, Customer First, Boundary-less, Humility and Passion.

The HDFC Life is also among the early entrants into the market and by now it is a leading company. The company’s vision statement states to be “one of the most successful and admired life insurance company which mean that we are the one of the most trusted company, the easiest to deal with, offer the best value for money and set the standards in the industry. The most obvious choice for all.” HDFC Life also does not make any mission statement but talks about its values observed at work such as excellence, people engagement, integrity, customer centricity and collaboration. It seems making statements on values is the new way of making mission statement. In respect of HDFC also the urge to reach out to all the eligible people in the market is conspicuously absent.

Making a statement Making good vision statement or mission statement is apparently not an easy task. All the companies mentioned here have projected themselves as dreamers but the vision of all of them reflects some kind of self centricity and not creating value for the vast population of India through financial protection, systematic savings and service from cradle to grave. But this is not surprising.

If we objectively analyze the achievement of the life insurance industry in India after 72 years of Independence and 19 years of the liberalization, the market has remained unexploited and unserved to a very large extent. Reaching out to all the insurable people both female and the male in the country and providing them adequate life insurance cover and annuity plans should have been the focus of each vision statement.

In this column I wrote about lack of awareness about insurance as a cause of low penetration and poor density. The commitment has to start at the regulator’s level and then at the company’s level so that the vision for all is realized. Unfortunately today every company is strengthening its own brand but none is committed to transforming the lives of the people through life insurance.

(The writer, Kamalji Sahay is former MD & CEO, Star Union Dai-ichi Life Insurance) TOP

Looking to invest in ULIPs? Check out the best 4G ULIPs for maximum returns – Financial Express – 25th April 2019

Unit-Linked Insurance Products (ULIPs) have evolved over the years with more transparency and reliability as an investment product. Earlier agents and distributors made high commissions through ULIPs, which led to rampant misselling, and customers were misled that the investment required the payment of premiums for only 3 years and were not made aware of the benefits of long-term investment.

IRDAI limited the charges on all ULIPs, which limited the capping of ULIP charges around 2010. HDFC Life was the

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first company to introduce zero commission ULIP, named Click2Invest, in 2015.

The new 4G ULIPs have low cost and zero commission where charges like premium allocation, policy administration are typically zero. The fund management charges are also capped at 1.35% by IRDAI and range between 1 and 1.35%. There is an inbuilt life cover in the ULIPs for which a customer pays mortality charges.

Companies like Bajaj Allianz Life Insurance disrupted the market by introducing the return of mortality charge (ROMC) feature through its Goal Assure ULIP. The industry is also catching up the innovation and many other insurance companies like Canara HSBC with their Invest 4G ULIP and HDFC Life Insurance with their Click 2 Wealth have also introduced the ROMC feature.

(By Santosh Agarwal, Chief Business Officer-Life Insurance, and Policybazaar.com) TOP

Surrender your insurance policy only if you really need the money – Mint – 24th April 2019

I am often asked whether or not to surrender an insurance policy. Surrendering means to stop an insurance mid-term. The question is most difficult to answer in traditional life insurance because the analysis must factor in the downside of a surrender penalty, taxes not being returned and loss of death benefit against the possible benefit of better investment returns.

All insurances—life, general and health—have a provision for surrender if you have not made a claim. This provision is poorly understood because when you

buy insurance the focus is on benefits and claim settlement. We do not expect to surrender insurance mid-term. However, circumstances do change, new products do get introduced or you may conclude that you bought the wrong product. Surrender is frustrating because you feel the pinch of penalties.

All insurance products allow early closures. In the free-look period, typically the first 15 days after you receive the insurance, you can claim a complete refund. There may be some minor deductions for administrative or risk-related costs. This free-look period is allowed in life, health and general insurance and the clock starts from when you receive the insurance contract. So the first thing to do when the documents reach you is to read them and decide if this is what you wanted.

Surrender costs increase dramatically once the free-look period is over. In health insurance, early exits are possible but refunds are made using the short period scale. This imposes a severe penalty—if you leave in the first three months, 50% of your premium will be refunded; between three and six months, 25% will be returned; and after six months, nothing. These are the minimum amounts that need to be

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returned but a few insurers pay more than the minimum scale. In travel insurance, refunds are linked to the trip start date. You can claim a full refund with minor deductions for administrative charges if your trip is cancelled. You can also claim a deduction if you come back from the trip early. The rules vary by insurer but generally if you spend half the time you had planned for, you can get 25% of your premium back. Motor insurance also allows for surrender using short period scales similar to health insurance.

In life insurance, unit-linked insurance products (Ulips) have two different kinds of surrender periods. During the first five years, you do not get your money back. On surrender, the insurer will move your balance to a discontinuation fund where you earn a return of 3.5%; this will be paid after five years and after deducting mortality charges. If you surrender after five years, you may withdraw your accumulated funds without a charge. Traditional life insurance has more onerous surrender terms. Most products have a tenure of over 10 years. In these, no money is refunded if you close the insurance in the first three years, after that 30% of premiums paid are refunded if you close in the fourth year or less, 50% is returned until the seventh year and 90% is returned in the last two years. In all these cases, the act of surrender destroys value because you do not even get your capital back. This surrender scale is the minimum prescribed and policyholder-focused insurers do pay more.

Surrendering insurance is cumbersome because of the processes. Life insurers require that you visit the insurer’s branch with the original policy copy. In health and travel insurance, the process is simpler and may be done over email. Insurers insist on a physical meeting before accepting surrender because they would like to convince you to retain the insurance. They also try to determine if you are being incorrectly pushed into this decision by an adviser who seeks to replace your insurance with the objective of earning new business incentives.

You should consider surrender only if you really need the money or what you bought is completely different from what you expected. But once you have made the decision, see it through. I often see policyholders do a detailed analysis that suggests surrender as the best option. Yet they do not follow through with this because surrender is an explicit recognition that they made a judgement error. Vanity triumphs over practicality.

(The writer is Kapil Mehta.) TOP

From AI to block chain, here's how one of India’s largest life insurer is leveraging Insurtech transformation – Entrepreneur – 22nd April 2019

The life insurance industry is in the middle of a major transformation, which is marked by innovation and technological developments. The idea is to improve customer experience across the value chain and increase the industry’s penetration levels.

Almost every insurance company in the world is embracing this new approach and if they don’t, the insurer is likely to be irrelevant with time. And hence, we are seeing the rise of the insurtech era. In fact, in 2016, insurance tech start-ups raised a total of USD 21.18 million, and this figure crossed USD 289.60 million last year.

In a conversation with Entrepreneur India, discussing the rise of the insurtech companies Manik Nangia, Director and Chief Operations Officer, Max Life says tech start-ups have immense potential to disrupt the sector. Insurance distribution is likely to be impacted the most followed by underwriting, claims management and product creation.

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“The future looks promising and one can see that funding is flowing into startups and helping them scale, while legacy players are moving beyond initial experiments and are beginning to implement new technology throughout their businesses. In both scenarios it is a distribution that continues to be most impacted via disruption followed by other functions like underwriting, claims management, product creation that is witnessing innovation at a stable pace,” he shared.

Internal Disruption Max Life is looking to optimize this transformation through a greater customer centricity by digitalizing its existing processes and conversational interfaces like chat bots, in the areas of recruitment, sales and services.

To further leverage its digital capabilities, Nangia says the insurer is ensuring is equipping new age sellers with advanced digital tools like Customer Solution Generator (CSG) tool, which is widely used by agents for 90-second lead management, smart need analysis, customer prospecting and preliminary solution generation. While its latest app mPro is designed to assist sellers in faster policy issuance.

“Policy-related transactions that earlier took about 30 minutes and 90 fields of information, will now only entail about 10 minutes and 20 fields of data to process. By eliminating a labyrinth of long drawn transactions, we have also managed to pioneer unique customer patterns that now helps us proactively dish out automated solutions and benefits illustrations post need discovery for the customer,” he added.

Adopting In the age of digital transformation, one cannot stop talking about new age technologies like block chain, artificial intelligence, robotics, IoT, etc. Nangia opines that, in the life insurance industry, there is huge potential waiting to be unlocked at the hands of AI &IoT whether in terms of real-time analysis or automatic triggering of reactions or services.

Giving an example of block chain, Nangia shares that with massive volumes of customer data waiting to be processed in real time, new age technologies can define the future of the industry.

“By virtue of facilitating secure data management across multiple interfaces and stakeholders without loss of integrity, block chain is being viewed with a positive lens due to its perceived effectivity when it comes to identity management, underwriting, claims processing, fraud management and reliable data availability. It is also differentiated on grounds of offering reduced operational costs, smart contracts and Decentralized Autonomous Organizations (DAOs) adding to the benefits in policy management,” he noted.

Currently at Max Life Insurance has deployed block chain specifically for risk selection and claims purposes. On the AI front, to assist its customer the company is using Interactive Voice Response (IVR tree) along with voice biometric mechanisms for sentiment analysis. While on the seller side, the insurer has developed digital pipes to streamline its policy underwriting, issuance, renewals and servicing process.

(The writer is Vanita D'souza.)

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Insurers struggle with populist life cover scheme PMJJBY - The Hindu Business Line – 23rd April 2019

Low premium life cover scheme, Pradhan Mantri Jeevan JyotiBimaYojana (PMJJBY), has become a ‘white elephant’ for insures. The losses under the scheme are understood to have gone up over 20 per cent for many an insurer in the financial year ended March 31, 2019 impacting their profitability.

“Though private players are also selling it, its a loss-making portfolio for many. The industry has requested the government for enhancement of premium from present Rs330 to around Rs440 or so,” RM Vishakha, Managing Director and Chief Executive Officer, India First Life Insurance Company Ltd, told

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BusinessLine. The PMJJBY scheme offers a life cover of Rs2 lakh at a premium of Rs330 per annum per member and is renewable every year with effect from June 1.

“While life cover is always good, it is populism which is the main problem with an otherwise good scheme. The issue is you and me can also subscribe for it even though we afford to pay a reasonable and workable premium,” said the Chief Financial Officer of a top insurer.

If there is no intervention, the losses will further mount; say insurers as both gross enrolment as well as total claims have been going up significantly.

“As per the provisional estimates, there has been a significant increase in enrolment as well as claims in the

year that ended March 31, 2019 and loss could escalate beyond 20 per cent,” said the CFO.

Private insures feel that LIC, the leading administrator of the policy, with a lion’s share should also confront the government on the disadvantageous aspects of the scheme. When contacted, a top executive of the LIC has refused to comment.

According to government data, the gross enrolment for PMJJBY in 2017-18 was 5.33 crore with total paid claim amount of Rs1795.32 crore. Since its inception in 2015, the subscriber base has gone up from 2.96 crore to 5.33 crore and claim amount paid rose by over three times in the same period. This assumes significance as the PMJJBY is now set for renewal by automatic debit of premium from bank account of the subscribers next month.

(The writer is G Naga Sridhar.)

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First-year premium of life insurers up 11 per cent in FY19; LIC retains top slot - The Hindu Business Line – 19th April 2019

The first-year premium of life insurers increased by 10.73 per cent to Rs 2, 14,673 crore in FY19 from Rs 1,93,866 crore in FY18. This marks about 300-basis point decrease in the growth. The first-year premium had increased by 13.5 per cent in FY18.

Growth-driver An analysis of data released by the Insurance Regulatory and Development Authority of India (IRDAI) shows that growth in FY19 was driven by a 39 per cent increase in group non-single premium.

Life Insurance Corporation of India registered 5.68 per cent growth in premium at Rs1, 42,192 crore (Rs 1,34,552). The total first-year premium of 23 private life insurers went up by 22.2 per cent to Rs 72,481 crore. While LIC enjoyed a market share of 66.24 per cent, its private sector peers’ market share stood at 33.76 per cent.

“The year was challenging indeed, with many headwinds such as markets not doing quite well. Things picked up only in the last four months for many industry players,” RM Vishakha, MD and CEO, India First Life Insurance Company Ltd, told BusinessLine.

While the growth in group non-single premium did make an impact, there was traction in retail and individual policies as well, which added up to the performance, she said. India First Life registered 39.94 per cent growth in first-year premium. However, the CEO of a leading insurance company was less

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upbeat. “We seem to be having a job-less growth which does not augur well for life insurance. The economy needs to be revived,” the CEO said on the condition of anonymity.

Non-life premiums Gross premium underwritten by non-life insurance companies increased 12.91 per cent to Rs1, 70,111 crore, against Rs1, 50,662 crore in the previous fiscal.

(The writer is G Naga Sridhar.) TOP

GENERAL INSURANCE

6 common mistakes to avoid while buying a travel insurance policy – Financial Express – 24th April 2019

Do you check the ‘insure trip’ option while booking a flight or just opt out to save some money? I bet most of us do that. Even in today’s world, where travelling becomes second nature to millennials, travel insurance remains as one of the most under-rated product in insurance.

Anything that puts you at risk before or during the trip can be covered with travel insurance. Starting from booking a flight or a train to booking hobby activities on your trip, insurance can help you be care-free about the unexpected financial losses that may occur during the trip.

Buying international travel insurance for your trip is mandated for the visa processes of many countries. But even if it is not mandated, people buy it for their own peace of mind and protection. Especially if the trip is a long one and booked in advance or if you are travelling with family, travel insurance should be a must. Let’s deep dive into the benefits offered by the new-age travel insurance companies.

Why is travel insurance required Firstly, there are some benefits that take care of all kinds of travellers like Trip Cancellation Benefit, Flight Delay Benefit, Missed Flight Benefit, Checked-In Baggage Loss or Delay, Medical Expenses Due to an Injury or Accident or Illness, Emergency Medical Treatment & Evacuation and Trip Abandonment Many times, a trip doesn’t go as per plan and it has to be cut short. It could be due to an emergency back home or at work. In such cases, your wallet may really be hurt with the non-refundable expenses for the bookings for the remaining days of your trip or for coming back to India. The last benefit takes care of just that!

Then there are some which are esp. important to people travelling abroad like: 1. Compassionate Family Visit In case someone needs a family member to come to them on their foreign trip to take care of them while they are hospitalized, this benefit helps you do just that.

2. Escort of A Minor Child Back Home Again, in case someone is hospitalized and there is a child amongst the co-passengers who cannot stay without adult supervision and needs to be brought back to India, this benefits helps cover that cost.

3. Financial Emergency Cash When travelling with a family, if all the traveller cheques, cash, cards are stolen and there is no emergency cash, this benefit can come to the rescue.

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4. Loss of Passport A common fear amongst people and rightfully so. A passport being stolen can be the worst nightmare for a traveller, esp. travelling with the family. This benefit makes sure you are covered for the expenses it takes to get through the procedures required.

5. Personal Liability & Bail Bond If due to an unfortunate incident, there are any legal charges against a traveller while on the travel, this benefit pays for them.

While travel insurance should be one of the important components of your travel plan, it is also essential to understand how to choose travel insurance and the common mistakes made by travellers.

Below are some tips to keep in mind to secure your trip and avoid mistakes: 1. Never take travel insurance at the last minute: While you are excited and planning your trip, it is always recommended to plan your insurance ahead. This will help on utilising benefits such as a claim against trip cancellation and natural disasters. Also, insurance companies do not usually allow you to buy a travel insurance policy after the onset of your trip.

2. Essentials: It is also important to make sure that the policy covers the essentials of your trip i.e. right from the booking of your trip with benefits like Trip Cancellation to the transit time with benefits like checked-in baggage delay or loss, flight delay to while you are on the trip like loss of passport, medical emergency, personal liability and bail bond & more.

3. Thinking That One Size Fits All: Customise your insurance plan as per your needs. You might be travelling to a tourist destination. But every trip is planned differently. You should check for how many days you are travelling, how many people are going to be there, what activities have you planned, how many connecting flights you have and basis this, you should check the benefits that make sense for you.

4. Proper declaration: It is important to mention any existing medical conditions or diseases in other words if there are any pre-existing diseases while availing a policy, as most of the insurance providers now-a-days cover emergencies like hospitalisation for pre-existing illness but only if declared before the start of the trip.

5. Know the terms: Most insurance companies claim that their claim process is the easiest. It is very important to understand the documents before signing-up because there will be Asterisk (*) waiting to surprise you at the time of claims

6. Do not just look at the premium: Finally, comparing different travel insurance quotes is great. But make sure, along with the price you are also checking the below: a. Medical benefits you are getting and how much is the limit of Sum Insured for each b. Terms of the claim. A lot of times, the terms of claim will be so rare that despite the benefit being there, you won’t be able to claim for it c. Claims process and the company’s past claims record

(By Vivek Chaturvedi, Head of Marketing -Digit Insurance)

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When can you extend foreign travel insurance period without paying more premiums? – The Economic Times – 24th April 2019

Normally when you travel overseas, you purchase a travel insurance policy for the period for which you will be abroad. However, if the duration of your stay abroad gets extended due to an emergency and the airline asks you to rebook your return ticket for a future date, then in such a scenario, you can extend your travel insurance for a limited time period.

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If the cancellation is made from the airline's end, then they will bear the cost of your new flight ticket. But, will your insurer bear the cost (additional premium) of the extended travel insurance?

Nikhil Apte, Chief Product Officer, Royal Sundaram General Insurance said, "To extend your travel insurance during the overseas trip, first you need to have a valid travel insurance policy, that is, the policy should have been bought before the commencement of the journey." He added, "Once you reach abroad without travel insurance, you cannot buy it overseas. It is because the cover starts at the immigration counter of the home country and continues until the immigration is completed after returning to the home country. Any insurance policy brought after the commencement of the journey is invalid."

While travelling abroad and having valid travel insurance, there can be two reasons you could have to extend your travel policy.

When you want to reschedule your return ticket as per your own discretion and want to extend it to a future date. This is known as a planned trip extension.

When your airline asks you to extend your return ticket due to an emergency. This is known as emergency trip extension.

In both scenarios, you need to extend your travel insurance till the time you come back to your home country else, if anything happens during that point in time, you need to bear the cost which can be related to further trip cancellations, trip delays, medical emergencies, loss of baggage, and so on. Emergency trip extension

In this situation, your insurer may not charge you additional premium towards extended travel insurance. In case your flight gets delayed or postponed due to uncontrollable circumstances like a civil war or unrest, airline cancellation, any weather phenomena, etc. and your policy provides the benefit of emergency trip extension, then your insurance cover will get extended automatically for the time period specified in your policy for this benefit. In such a case, you neither have to purchase a new travel policy nor do you have to pay an additional premium towards it.

Tarun Mathur, Chief Business Officer- General Insurance, Policybazaar.com said that one normally gets an emergency trip extension benefit feature in such policies and, it will be mentioned in the policy document that for how many days the policy can be extended without payment of additional premium. Almost all insurers follow the same practice of providing extension in case of an emergency. But still, one must always check their travel insurance cover details and read the policy document carefully while purchasing it. "Generally, the extension provided to you can be for 7-15 days depending upon the insurer. So, make sure that you re-book your flight tickets within the stipulated time period as mentioned in your travel policy. This way, you will not have to pay an extra premium in case of an emergency extension," he said.

How and when to inform the insurer? To avail this extension, all you need to do is write an e-mail to your insurer or claim settlement mail-id (which is mentioned on the travel insurance policy document) citing the reason for the emergency extension and request them to extend your travel insurance. Before that, you also need to produce a letter from your airline stating the reason for flight cancellation or some official letter proving that it is an emergency trip extension and not a planned trip extension. You can even call the insurer on their helpline number (which is mentioned on the travel insurance policy document) immediately after receiving any intimation from the airline related to flight

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cancellation/rescheduling while you are abroad. However, Apte recommends, "you should inform the insurer through email of such an incident along with the proof of communication from the airlines of such delay or cancellation."

Do you get a new policy with extended dates? Mathur said, "In case of emergency extension, where you have an in-built emergency extension in your policy, the same (existing) policy will be continued for the extended period. You do not get any separate insurance certificate unless you plan to extend your stay beyond the emergency trip extension time frame."

Do you get any other benefits? Apart from 'no additional premium' being charged for the extended policy, you may also get some additional benefits from the insurer in case of an emergency trip extension. "Some insurance companies extend your existing coverage for 7 to maximum of 15 days of your stay and some insurers may even offer an additional benefit for the emergency extension. For example, the insurer might allocate an additional $1,000 for your emergency hotel booking or flight rescheduling," said Mathur.

Planned trip extension It is a situation where you have to pay additional premium for extending your travel insurance.

There could be a situation where you will have to reschedule your return ticket and extend it to a future date voluntarily. Apte said, "the option of travel insurance policy extension is not available (on a guaranteed basis) if you voluntarily extend your stay. If there is some emergency and you want to extend the stay, then again, there is no automatic extension provided to you. The extension is granted only for valid reasons and for that, you have to pay additional premium. Also, the process is different as you have to request for extension clearly mentioning the reason and the time frame of extension," he said.

For example, if you are staying with your relative in the US and he (relative) falls ill, and you have to stay back for two weeks to take care of him then it's a valid reason. For such requests, insurance companies will extend the policy by way of endorsement subject to the confirmation that the extension is not due to any health emergency related to the insured (policyholder) and the insured is in good health.

How and when to inform the insurer? All the details on how to contact the insurer are mentioned in your policy document. So, you just need to write the application on your behalf via e-mail. Mathur said that the policyholder has to inform the insurer at least 7-10 days in advance of the expiry of insurance policy to extend the cover for the number of days the insured wants to stay further.

"The insurer will inform you (insured) about the additional premium that you need to pay for the extended number of days. The insurer will send you a payment link. Once you make the payment through online banking, then the insurer will share the endorsement schedule on your existing policy. This means that they will not issue a new policy, but a separate insurance certificate will be issued via e-mail which you need to keep as a proof of extension till the time you come back to the home country. Hence, for the extended time period, your existing policy (along with endorsement) will continue providing you the same cover," he said.

How much extension you can get Typically, a travel insurance policy is extendable up to 180 days for which you have to pay an additional premium through online banking. You should also know that taking a planned trip extension is not guaranteed, it is upon the insurer to approve the extension based on their underwriting. After mailing the insurer, their underwriting team evaluates your risk profile and basis the analysis the extension is approved and provided to you over an e-mail. Each insurer has its own extension policy and hence, the permission is granted accordingly.

(The writer is Navneet Dubey, Editor, The Economic Times.) TOP

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Public sector insurers lose market share in premium collection to private players – The Indian express – 22nd April 2019

The banking sector saga is repeating in the insurance sector with public sector general insurance companies slowly losing market share in premium collection to private players. Advertising

Data released by the General Insurance Council shows that the four main public sector insurers — New India Assurance, United India Insurance, National Insurance and Oriental Insurance Company – which have recorded a premium collection of Rs 68,719 crore, up 1.37 per cent, have

ceded five per cent of their market share to the private sector insurers (excluding stand alone health insurers) which have mobilised a total premium of Rs 81,600 crore, up almost 25 per cent, during 2018-19.

The merger proposal of three public sector insurers by the government, solvency issues and unfair practices by private players in the motor business are being cited by experts for the erosion in market share by public sector players. The four public sector companies, led by New India Assurance, have a market share of 42.50 per cent at the end of FY 2018-19 as compared to almost 48 per cent in 2017-18. The total private sector market share, including health insurers, has gone up to around 56.34 per cent from 52 per cent last year. The private sector insurers (excluding the stand alone health insurers) led by ICICI Lombard General Insurance, have increased their market share to 50.47 per cent in 2018-19.

Seven stand-alone private sector health insurers, led by Star Health, have mobilised a total premium of Rs 8,314 crore, up 37 per cent, and have expanded their market share from 5.87 per cent to seven per cent in 2018-19.

Insurance experts blamed the government apathy and the merger proposal for the lacklustre performance of public sector players. “The government last year announced the merger of three public sector players (Oriental, National and United India) and kept the companies and employees on tenterhooks. There are solvency issues in these three companies and the government has failed to inject enough capital into these firms,” said an official of an insurance company.

“Public sector banks faced similar issues earlier and lost market share. The government was also slow in appointing CEOs in public sector players,” he said.

Two of the public sector general insurers – National Insurance and United India Insurance — have recorded a negative growth. Stock market-listed New India Assurance, India’s largest general insurer having operations in 28 countries, garnered a global premium of Rs 27,000 crore including Rs 23,910 crore of domestic premiums, up 5.25 per cent.

“We are now bouncing back and have recorded a 25 per cent growth in April. By second quarter of this fiscal, we will stabilise our double digit premium growth with healthy profitability,” said an official of New India Assurance. Atul Sahai, who took over the reins of the company as CMD in December is focussing on balancing growth and profitability of the company. Industry analysts have pointed out that the public sector companies in general have heavily lost own damage motor business, the largest portfolio in the Indian general insurance industry, which is being cornered by majority of private sector insurers through unfair means.

On the unfair practices by some private players in the motor business, an official of a PSU insurer said, “the issues in motor business have been impacting the PSU general insurance companies… this is something to be taken up at appropriate forums. It is strange that a regulation that has been brought in for protecting the policyholder interest is allegedly not being treated sacrosanct by certain players. We

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do feel a little disadvantaged to certain extent. We are hoping that necessary corrections take place at the soonest.”

Led by the private sector companies, domestic general insurance industry, with a mix of 34 players, has grown by 13 per cent to Rs 170,103 crore in 2018-19. ICICI Lombard General Insurance has mobilised a total premium of at Rs Rs14,488 crore, up 17.25 per cent and is now the fourth largest general insurer, dislodging the public sector Oriental Insurance Company, in the country.

The other top five private sector general insurers are: Bajaj Allianz General insurance (Rs 11,000 crore, up 17 per cent), HDFC Ergo Genera Insurance (Rs 8,612 crore, up 18 per cent), Tata AIG General Insurance (Rs 7,742 crore, up 43 per cent) and Reliance General (Rs 6,200 crore, up 22 per cent).

SBI General Insurance, which is planning to go for an IPO during the fourth quarter of FY 2019-20, has garnered a total premium of Rs 4,700 crore, up 33 per cent, during 2018-19. The writer is George Mathew.

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Indian jeweller learns hard insurance truth - Insurance Business ASIA – 22nd April 2019

A jewellery firm in India has been hit by a double whammy, with a courier making off with its precious wares and the firm later learning that its jeweler’s block insurance policy did not cover the incident.

Earlier this month, the jewellery company reported that an official of a logistics company ran away with 11 kilograms of gold jewellery worth INR35 million (around US$504,000). According to an Economic Times report, the jeweler’s insurance claim was denied, because the policy did not have a clause for “infidelity” – or dishonesty by logistics companies.

The policy also did not cover gross negligence of couriers, loss due to unattended vehicles, and mysterious disappearance of goods.

While police were able to recover 10 out of the 11 kilograms of stolen jewellery, the denial of the insurance claim came as a shock to the Indian jewellery trade.

“Many only now realise that if goods disappear while in transit because of infidelity or unattended vehicles, the extant insurance policy doesn’t cover such loss,” said Bhavesh Kataria of Kataria Jewellery Insurance, a leading insurance broker for the trade.

According to Kataria, to cover such situations logistics companies should have fidelity policies for their employees, or jewellers can take out a third-party fidelity policy that covers logistics companies, goldsmiths, and other parties that come in contact with their goods.

In case of loss caused by negligence of the courier, such as disappearance from an unattended vehicle, the only option is that the logistics company must have a legal liability insurance policy.

Upon learning this, Surendra Mehta, national secretary of the India Bullion &Jewellers Association, said that, from now on, jewellers will insist that logistics companies take out such insurance policies before transacting with them to deliver goods to exhibitions or transfer them between branches.

(The writer is Gabriel Olano.)

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Non-life insurance premium up 13% at Rs 1.7 trillion in FY19: Irdai - Business Standard – 19th April 2019

Non-life insurance firms registered a rise of 13 per cent in their collective premium income to Rs 1.70 trillion in the financial year ended March, according to data from Irdai. The 34 non-life insurers had a gross premium of Rs 1.51 trillion in 2017-18.

Among these insurers, as many as 25 are categorised as general insurers, seven as standalone private sector insurers while the rest of the two are government-owned specialised insurers.

For the 25 general insurers, the collective gross premium in 2018-19 stood at Rs 1.50 trillion, up by nearly 13 per cent from Rs 1.33 lakh crore a year ago, showed the Insurance Regulatory

and Development Authority of India (Irdai) data.

While the standalone private health insurers witnessed a rise of 37 per cent in their combined premium to Rs 11,368.82 crore in the financial year ended March 2019, against Rs 8,314.27 crore a year ago. However, the state-owned specialised insurers -- Agricultural Insurance Company of India and ECGC Ltd -- registered a drop of 7.75 per cent in premium at Rs 8,425.75 crore during the fiscal ended March 2019, as against Rs 9,133.78 crore in the previous financial year.

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HEALTH INSURANCE

Private hospitals in Bengaluru threaten to stop cashless insurance – The Times of India – 25th April 2019

Private hospitals in Bengaluru are threatening to stop honouring cashless claims of public sector insurance companies from June 1 unless these firms stop dictating tariffs for treatment.

The decision to discontinue the cashless claims was taken on Wednesday at a meeting of the Private Hospitals and Nursing Homes Association (Phana), Bengaluru. Phana has over 400 hospitals in the city as members.

Over 60% of patients visiting a corporate hospital avail cashless insurance schemes. If the cashless facility is not

extended, patients will have to pay the hospital and then apply for reimbursement from the insurance company. Phana members at the meeting deliberated on the problems faced by private hospitals because of the reluctance of insurance companies to hike treatment costs.

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Why PM health insurance scheme has a pricing issue – The Times of India – 25th April 2019

Despite several state health insurance schemes being integrated with the Centre’s flagship Ayushman Bharat health insurance scheme, prices for medical procedure in each state are not only different from the price set by the Centre but also see a huge variation. This leads to a situation where a big chunk of the population could be left unserved as private hospitals hesitate to join the initiative launched over six months ago by Prime Minister Narendra Modi.

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Prices under Ayushman Bharat, also called the PM Jan Arogya Yojana (PMJAY), are lower by 60%-70% for certain tertiary (highly-specialised and complex) surgeries compared with state insurance schemes, leading to even small nursing homes and mid-level hospitals (with 50-100 beds) in cities like Delhi and Mumbai not enrolling for the central programme.

Ayushman Bharat, launched in September last year, has been touted as the world’s largest government-funded healthcare programme covering 50 crore beneficiaries with an annual health cover of Rs 5 lakh per family.

States with their own insurance schemes, including Tamil Nadu, Andhra Pradesh, Gujarat, and Maharashtra, have either integrated their schemes with PMJAY, or are in the process integrated their schemes with PMJAY, or are in the process of doing so. In fact, most multi-specialty private hospitals are not part of the state insurance schemes, particularly in cities like Mumbai,

indicating the ‘unattractive’ rates offered under them.

The huge variation between rates of the centre’s health insurance scheme and the states’ rates has led a majority of private multi-specialty hospitals to keep away from the Central scheme and experts say that this could jeopardise PMJAY’s success by leading to a situation where large sections of the population are without access to treatment for critical or life-threatening ailments.

“The PMJAY rates are unrealistic and do not cover even 50% of the cost for many procedures (see box). This has proved to be a deterrent against enrolling for the scheme. Until a scientific costing study is done, existing rates under various state schemes can be aligned by taking the maximum/best rate from different states’ rate cards. This would have led to many private hospitals joining the scheme, benefiting populations across different states,” said Girdhar J Gyani, director general, Association of Healthcare Providers (India), which represents over 3,000 (100-bed plus) hospitals.

Alignment in rates once scheme matures: Centre the government for its part expects some convergence in rates as the scheme matures and there is collective bargaining for major devices and supplies.

“Cost structures underpinning health services vary widely across the country. We have given the states flexibility to increase rates up to 10% or reduce them as much as needed to suit local market conditions. Further, states can retain their existing package rates, even if they are higher than the prescribed 10% flexibility slab,” InduBhushan, CEO, National Health Authority (NHA), told TOI.

The apex agency, looking after implementation of PMJAY, NHA, has initiated an exercise to rationalise health benefit packages in consultation with stakeholders. Over 15,000 hospitals are now empanelled under PMJAY, according to its website. Around 6,000 private hospitals under Ayushman Bharat, of which most are small nursing homes, are not equipped with multi-speciality care, experts said.

Ironically, public healthcare facilities are stretched with a huge shortage of doctors, and infrastructure.

For example, there is a shortfall of 81% specialist doctors, for critical therapies like gynecology and pediatrics, in a majority of the 5,500 community health centres that form an integral part of PMJAY.

“Reform is needed, including the shifting of focus and budgets to expand primary and preventive care, greater efficiencies from out-of-pocket funding, and more investment by private sector in meeting the demand at the bottom of the pyramid,” said Parijat Ghosh, partner Bain & Company.

Significantly, over 80% of tertiary care is provided by private hospitals. If a revision in PMJAY rates is done, several multi-speciality hospitals would join in, which is presently limited to a few. “At least 50%-60% increase in rates would be required to even consider empanelment,” said Ram Narain, executive director, Kokilaben Dhirubhai Ambani Hospital.

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Few private hospitals in Delhi have joined the scheme. When TOI spoke to officials, most said they were waiting for a directive from the state. “The Delhi government is yet to sign an MOU to adopt the central scheme. We will take a call on joining the scheme once there is clarity on the state’s stance,” said an official at BLK super specialty hospital. The managements of Apollo and Max hospitals said they are considering joining the scheme but a final call is yet to be taken.

Recently, Sir Ganga Ram hospital announced its joining PMJAY. Dr D S Rana, the hospital’s chairman, said rates decided by the Centre under the scheme are not justifiable. Nonetheless, he added, the hospital decided to join the scheme “so poor patients referred from various states don’t go without necessary treatment”.

(The writer is Rupali Mukherjee.) TOP

Healthy insurance - The Hindu Business Line – 24th April 2019

Recently, IRDA did some financial engineering and published its (draft) guidelines on settlement of personal accident and benefit based health insurance claims in instalments.

How will this impact the policy holders? In the life insurance segment, there are already annuity products available which were designed to keep the instalment payments.

Unlike any investment linked insurance plans like ULIP or savings based endowment plans, the premium paid for higher sum insured in personal accident policies are very minimal.

For instance, for a Rs. 30-lakh personal accident cover, the premium will be roughly around Rs. 2,000 a year.

Even at a marginal premium of Rs. 12 per annum, the Pradhan Mantri Accident Insurance scheme offers Rs. 2 lakh coverage. So, the input premium is low for such products while pay-out amount is high for insurers.

However, the incidence of claims helps insurers to manage the portfolio profitably based on the risk premium calculations by actuaries. Instalment claim payout, based on the acceptance by the policyholder or beneficiary, will help to hold the outflow of funds for the insurers.

From the beneficiaries’ perspective, it will be like a pension for a period of five years that can help to insulate the claim amount by the family of the deceased from any aggressive creditors. There are scenarios wherein such creditors may force the bereaved family to settle their outstanding in one go, after the demise of the policyholder.

Product design Though, this can be a good option for the policyholders, certain aspects should be taken into consideration at the time of product design as well as at the operational level. As Insurers are going to retain the fund, the instalment pay-outs should be very attractive.

IRDA has already clarified that the claim amount under the instalment payout will be higher than the normal claim pay-out. However, with ease of access to many competitive products, the policyholder/beneficiary prefers to get the lump sum benefit, as he can opt for other financial products.

A person opting for instalment pay-out actually reinforces his trust with the insurer making the contract get extended for a period of five years. Insurers as a goodwill gesture can evaluate the risks of the family and suggest to them more risk coverage products. However, mis-selling by the agents/brokers should be avoided.

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Operational issues In the case of health benefit policies, lump sum may not be attractive for all the cases as healthcare expenses can be unpredictable.

As it has been defined that payouts should be defined based on specific dates, a person who opts for instalment payments under health benefit policies will face constraints based on such inflexibilities should also ensure that this option is not be mis-used by fraudsters.

This option can also help insurers to clean and clear out the fraudsters in the long run.

To conclude, overall it is a win-win for both insurers and also the policyholders/beneficiaries. However, the success depends on how well it is used without mis-selling and dealing with product design and operational issues.

Saravanan is a professor of finance and accounting, IIM Tiruchirappalli, and Jayaprakash works in the insurance industry.

(The writers are P Saravanan and S Jayaprakash.)

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Government adopts existing state level PPP program for screening NCDs under Ayushman Bharat – Mint – 23rd April 2019

Government has adopted an existing state level disease screening program running in Public Private Partnership (PPP) mode for monitoring the Non Communicable Diseases (NCDs) under Ayushman Bharart-Pradhan Mantri Jan Arogya Yojana (PMJAY).

Health and wellness component of Ayushman Bharat aims to address the requirements of preventive and promotive health services through Health & Wellness Centres. The government realized that the contribution of NCDs to the overall disease burden in

the country has increased over the years. In the past many district hospitals in the country have focused mainly on communicable diseases and reproductive and child health. As a result of which the capacity for handling NCD cases has not been adequately developed.

NITI Aayog, government’s policy think tank also recently chalked out a PPP mode plan to be adopted under AB-PMAJY. NITI Aayog held that the patients in mofussil towns and rural areas are largely underserviced. In this context, PPP for NCDs in district hospitals will play a pivotal role in ensuring the availability of the services at least at the district headquarters.

The government chose to expand a program that was already running in Andhra Pradesh and Telangana under AB-PMJAY. In July 2016, Tata Trusts and Dell started a programme in Andhra Pradesh – the Master Mahila Check Up Program -- to screen women, over the age of 30, for seven NCDs -- Diabetes, Hypertension, Hormonal imbalances, Ophthalmic problems, and three cancers (Oral, Cervical, and Breast cancer). The Government of Telangana too adopted the programme in April 2017. Under these state-specific programmes, 21 lakh individuals were screened in Andhra Pradesh, and 24.9 lakh in Telangana.

“The programmes attracted the attention of the central government, as they were in alignment with the Union Government’s on-going NCDs screening programme since 2010. An MoU was signed in June 2018 for this Tata Trusts-Dell programme to be scaled up in the entire country, under the umbrella of the Ayushman Bharat scheme," said Sita Rama Budaraju, Senior Consultant – Health, Tata Trusts.

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While Dell has developed the Ayushman Bharat - NCD application, Tata Trusts is the implementation partner on ground, training ASHA volunteers, Auxiliary Nurse Midwives (ANMs), and Medical Officers (MO), on the software, and assisting states in the roll-out and monitoring of this programme.

“As a result of this MoU, the Trusts and Dell have thus far enrolled 52.19 lakh individuals out of whom 27.4 lakh have already been screened, in the past one year in about 400 districts of 19 states. At present, there are about 10,000 ANMs doing the screenings. Since 2010, government’s NCD screening programme, now aided by the Tata Trusts-Dell programme, has enrolled about 4.85 crore citizens, and screened 53 lakh citizens," said Budaraju.

Presently, in India patients have to travel long distances for availing medical services for NCDs due to urban bias in the availability of private health care, especially secondary and tertiary care which is disproportionately skewed towards Tier-1 cities. “The work by Dell and Tata Trust in critical for ensuring continuum of care and linking the health and wellness centres with PMJAY. Now we will need to work on expanding the supply of tertiary care services in tier 2 and tier 3 cities so that our beneficiaries don’t have to travel far to seek services.

Most of tertiary care services are currently located in large cities. This constrains their use by the poor. NCDs are exponentially increasing in the country which is also more expensive to treat as compared to communicable diseases," said InduBhushan, Chief Executive Officer (CEO), AB-PMJAY.

Ayushman Bharat, also popular as Modicare and described as the biggest government-funded health scheme, aims to cover over 10 crore poor and vulnerable families i.e. around 50 crore beneficiaries with health insurance up to Rs5 lakh per family per year for secondary and tertiary care hospitalization. The scheme also aims to set up 150,000 health and wellness centres across India by 2022 for providing primary health care. (The writer is Neetu Chandra Sharma.)

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Ways to boost your health insurance - The Hindu Business Line – 22nd April 2019

Healthcare costs in India have been rising at a double-digit rate over the past few years.

The mediclaim insurance provided by your employer or the personal health policy that is taken for a sum insured (SI) of Rs. 2-3 lakh may not be sufficient to meet your future medical expenses.

Hence, along with the regular health policy, opt for a super top-up health plan for a cost-effective combo that will enhance your health cover with a lower premium.

Super top-up plans Super top-up plans are similar to regular insurance plans, but will reimburse you only if your hospital bills cross a certain threshold, called a ‘deductible’.

For instance, if you have a top-up plan with a deductible of Rs. 3 lakh and an SI of Rs. 10 lakh, the top-up plan will come into force only once the combined medical bills in a policy year exceed Rs. 3 lakh, and it will reimburse you only for the amount exceeding Rs. 3 lakh. You have to pay the Rs. 3 lakh from your pocket or your existing regular health policy.

Since these top-up plans have a deductible, insurance companies consider them less risky and are made available at relatively low rates.

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Super top-up plans score over the other variant — top-up plans. In top-up plans, insurers reimburse up to the SI only if every single claim amount individually exceeds the deductible. But in super top-up, multiple claims in a policy year are summed up and the reimbursement is made once the aggregate amount exceeds the deductible.

Cost-effective HDFC ERGO my: health Medi sure, ICICI Lombard Health Booster, Bajaj Allianz Extra Care Plus, Apollo Munich Optima Super and Religare Enhance are some of the super top-up plans currently available.

For a 30-year-old man, his wife and two children (family floater), a super top-up plan with an SI of Rs. 10 lakh and a deductible of Rs. 5 lakh will have a premium of Rs. 3,500-7,600. Having a super top-up plan along with a base health policy with an SI of Rs. 3-5 lakh will lower your premium.

The premium charged in a regular health policy with an SI of Rs. 5 lakh for a family (two adults + two children) will be Rs. 15,000-17,000. Hence, for a total cover of Rs. 15 lakh, the aggregate annual premium would be Rs. 20,000-22,000. But if you buy a base health policy with an SI of Rs. 15 lakh, it will cost you Rs. 23,000-30,000.

Restoration benefit Buying a base health policy with a restoration or recharge or refill feature will also enhance your health cover. It is a benefit that reinstates the entire SI in a policy year when it gets exhausted due to incurred claims. This is more beneficial under family floater plans, wherein there is a chance that the entire SI may get exhausted due to a serious illness of a member, leaving the other family members vulnerable without a health insurance cover.

In such a situation, the insurance company immediately restores the entire SI (usually just once in a policy year) without you having to pay an additional premium. This can be utilised for any subsequent claims in the same year.

Almost all comprehensive health policies including Apollo Munich Optima Restore, Star Health Comprehensive, Max Bupa Health Companion, Cigna TTK ProHealth, HDFC ERGO Health Suraksha Gold Regain, Aditya Birla Activ Assure Diamond and Reliance Health Gain offer such restoration benefits. The premiums for these policies are slightly higher than the regular plans’, and the restoration benefit comes with different conditions. Check them before buying. Here are a few.

One, most health policies restore only upon complete exhaustion of the SI. However, some policies such as Max Bupa Health Companion refill the SI even in case of partial exhaustion of the base SI. Two, most policies do not offer the restoration SI for the same illness for which you had made the claim in a policy year.

However, Bajaj Allianz’s Health Guard and Star Family Health Optima-recharge allow to utilise the restored SI for the same ailment for which you had made the claim during a policy year. Three, most policies recharge the SI only once in a policy year. However, Religare Care offers unlimited recharges during a policy year, provided you pay for an add-on which costs around Rs. 1,000 for a Rs. 5- lakh SI.

(The writer is Dhuraivel Gunasekaran.) TOP

. Mental Health Insurance: Products introduced; here’s how they can be made better and widely accessible – Financial Express – 22nd April 2019

IRDAI’s circular to introduce mental health insurance (MHI) products is one of the most significant moves in the insurance industry in recent times. From an insurer’s perspective, the launch of any new product line involves taking considerable risk, arising primarily on account of the uncertainties related to underwriting, pricing, administering the policy, and claim settlement.

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Further, any new product comes with substantial costs for the insurance company. These include IT and system design costs, training costs for salespersons, underwriters, administrative staff, as well as claim assessors. Concerns regarding empanelment of hospitals, coordination with State Mental Health

Authorities, establishment of due processes, standardisation of procedures, and availability of mental health professionals are all to be addressed along with the introduction of MHI.

Mental Health Infrastructure in India According to the latest statistics released by the World Health Organisation, the mental health workforce in India is scant, with 0.29 psychiatrists, 0.07 psychologists, and 0.80 mental health nurses per 100,000 individuals. The current prevalence estimate of mental illness in India is 10.6%, or 10,600 out of 100,000 people.

To translate the above statistics, India only has 1 psychiatrist for every 37,000 people that currently experience some form of mental health concern. The availability of psychologists is even scarcer.

This gives an indication of the rising disease burden of mental health in India as well as the severe scarcity of mental health professionals. Therefore, a major practical concern is regarding the empanelment of appropriate and adequate inpatient and outpatient facilities to provide MHI.

Further, India only has about 800 inpatient care facilities – including state mental hospitals, psychiatric units in general hospitals, forensic inpatient units, and residential care facilities. If only inpatient treatment (hospitalisation) cover is included within MHI, there is a risk of over-hospitalisation for common mental disorders. This has the potential to further stress an already over-burdened system.

Accessibility to Facilities Although official estimates of waiting periods for accessibility to mental healthcare are unavailable for India, it can be extrapolated that latencies are expected due to the low ratio of mental health professionals to the general population. Moreover, physical accessibility to mental health centres is also problematic, given that the majority of the Indian population resides in rural areas, with limited access to psychiatric infrastructure. Alternatives like community psychiatry and training of community mental health workers may help ease the burden of service delivery in a preventative manner.

Social stigma and discrimination Another key roadblock to the provision of MHI will be the stigma and discrimination associated with mental illnesses. These are likely to restrict the marketability and demand of the products only to the socially progressive sections of society. However, it is hoped that the introduction of MHI would align the interests of the government, state bodies, and the insurance industry to create more awareness regarding mental illnesses.

Possible Pathways to Product Development Having outlined various practical hurdles in the implementation of MHI in India, we propose a few possible ways in which MHI can take shape:

1. Inpatient (Hospitalisation) Cover only: This satisfies the literal translation of the IRDAI directive to “make provision for medical insurance for treatment of mental illness on the same basis as is available for treatment of physical illness”, and would probably be the least complex approach for insurers among the other options to be discussed. However, this has shortcomings in that it leaves out a significant majority of the population requiring MHI (as the treatments of majority of mental illnesses do not require hospitalisation).

2. Inpatient (Hospitalisation) Cover only, but with OPD coverage for comorbid conditions: Certain mental conditions have high comorbidity (i.e., occur simultaneously) with physical conditions. For instance, the prevalence of major depression is significantly high in patients suffering from cancer, tuberculosis, and other acute and chronic illnesses. Including such coverage could be seen as a valuable

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addition by policyholders, and is likely to increase the marketability of the product. As insurance companies would already have the required data on the prevalence of these comorbid physical conditions, the pricing of the new MHI product would be subject to fewer risks.

If the product is marketed in the above-suggested ways, it is likely to be offered as an add-on feature, rather than being sold as a standalone product. This will reduce anti-selection (i.e., the increased tendency of high-risk individuals to purchase insurance), and will lower costs.

3. Inpatient as well as OPD covers: The most comprehensive coverage that can be offered to policyholders would be to cover inpatient as well as OPD care. OPD costs for physical illnesses are generally not covered under insurance. However, given the nature of mental health disorders, OPD cover can offer significant advantages. This is because majority of mental health treatment is carried out through pharmacological and psychological therapy – both of which could cause a significant financial burden to the policyholder due to their higher consultation costs and the mid- to long-term maintenance treatment period.

However, the pricing and design of these products are likely to pose significant challenges to insurers. Insurers will also need to have a robust claim underwriting and claim settlement procedure in place to allow for the higher frequency of claims; these products will also be significantly costlier. Given the high possibility of anti-selection, it is likely that this product could initially only be made available for groups. Group insurance with mandatory participation will minimise the possibility of adverse selection: for instance, providing MHI to each employee of a company under the company’s health insurance plan. The product could also feature a policy deductible, which will reduce costs, and further lower the possibility of anti-selection. Incorporating a provision for profit-sharing between the insurer and the group can allow the former to include conservative margins in the pricing without a loss in marketability. This will be of particular benefit in the early years of the product’s introduction since the experience with claims will be limited. Once the insurer has gathered sufficient claims experience, more competitive group products can be offered.

Similar retail products can also be offered. However, success in the retail market would depend on the perceived importance that the customer places on benefits covered in relation to its costs (which would be higher than the first two options discussed above).

Summary Mental Health Insurance has the potential to expedite the implementation of all other mental health reforms by making access to mental health services financially feasible. However, mental health insurance is a complicated piece of machinery, not only because of the considerations discussed above, but also because of the insurance industry’s relative inexperience in offering MHI products. It is hoped that the aforementioned considerations will assist in providing direction to key decision-makers and stakeholders.

(The writers are Hansika Kapoor and Surbhit Ahuja.)

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Group insurance cover explained – Mint – 20th April 2019

Group insurance plans are insurance policies that are meant to cover a group of people with a single insurance policy. “Group insurance policies are of two types: ones that the insurer provides you through your employer, and one that the insurer directly sells to a group of customers, such as students, teachers or bank employees," said Mahesh Bala Subramanian, chief executive officer of Kotak General Insurance.

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For instance, the health cover provided by your employer. Premiums may be charged in a periodic fashion from your salary or may be free. Your claims can either be in the cashless form or a reimbursement. Such plans may not require prior health check-ups. “Group insurance policies may be of any type — life insurance, health insurance, or some other types of general insurance," said Rohan Kumar, CEO, Toffee Insurance, a web insurance aggregator.

Why is it cheaper? It is cheaper to purchase a plan that covers a large group. “Group insurance plans are cheaper as the risk is spread over a large group and the premium is generally borne by employer. In some cases, where the employees cover their dependent parents, the premium is generally higher and the premium may be split between you and your employer," said Bala chander Sekhar, CEO, Renewbuy.com, an online insurance platform.

It is the employer-employee group insurance where the premiums actually differ and are lower than the individual health plans and not where the insurer directly sells it to a group of customers, said Bala subramanian. Premiums are low because the on-boarding and distribution costs are low for group health plans. The sum insured levels are also low in case of group plans and range from Rs2 lakh to Rs4 lakh.

Should you opt for it? Group insurance plans should definitely not be the only health plan you have. “The best strategy to have all bases covered is to supplement your group health plan with an individual or family floater plan, as it offers you the flexibility of having a customised cover tending to your family’s medical needs. It also enhances the coverage at a cheaper rate through the group health plan offered by your employer," said Sekhar.

Moreover, group health plans cannot be customised according to the needs of a particular individual or family. “Health needs vary and group plans have limited coverage. Only the sum insured can be modified," he said. If you only depend on your group plan, it will be problematic for you when you quit your job or your company decides to stop the cover. In both cases, you will lose a health cover.

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Fertility treatments like IVF should come under insurance cover: Health experts – Mint – 18th April 2019

With the number of infertility cases rising in the country, health experts have pitched for an urgent need to include fertility treatments in health insurance plans to minimise financial risks of persons seeking help.

Currently, both private and public health insurers do not include fertility procedures and treatments under their cover plans, experts said.

According to a study by a Bengaluru-based medical technology company, 27.5 million couples in India are suffering from infertility and are actively seeking children.

The number is estimated to rise by more than 10 per cent by 2020.

Dr Archana Dhawan Bajaj, gynecologist, obstetrician and IVF expert, Nurture IVF Centre, said health insurance plans providing cover for all fertility procedures, treatment and care would be a boon for affected couples who presently cannot afford advanced treatment.

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"Infertile couples have now options such as in vitro fertilization (IVF) treatment where the eggs and sperm are combined and fertilised 'in vitro' (outside the body in controlled environment). It has come up as a boon for those who face difficulty in conceiving naturally.

"But the cost of IVF procedure in India varies from Rs1 lakh to Rs2.5 lakh which is expensive for many of the couples. Therefore, they either avoid treatment or take debt for the desire of a baby.

We need to reduce both financial and physical risks. Experts can take care of physical and medical risks, however insurers can help in a big way to minimise financial risks," Dr Bajaj said.

Dr Bajaj said insurance companies face difficulties in providing mediclaim for IVF treatment because they provide cover mainly for illnesses and diseases which require hospitalisation.

Only maternity costs are currently covered by health policies not IVF treatment, which is considered a pregnancy-related issue and not an illness, Dr Shweta Mittal Gupta, senior consultant, centre of IVF and human reproduction at Sir Ganga Ram Hospital.

Infertility affects about 10 to 15 per cent of married couples, Dr Gupta said. However patients seeking treatment for same are few.

This could be attributed to lack of knowledge as well as high cost of treatments which are mostly available in the private sector and few hospitals in the government sector are offering advanced infertility treatment like IVF, said Dr Gupta.

"There are many countries in the world which are covering all fertility treatments under insurance. This helps couples in seeking timely investigation and treatment.

"It is the need of the hour in India to cover infertility treatments like laparoscopy, hysteroscopy, fertility medications, intrauterine insemination (IUI) and IVF under insurance like any other medical or surgical conditions which are covered," Gupta said.

Dr Dhrupti Dedhia, consultant obstetrician and gynecologist at Surya Hospitals, said currently only 1 per cent infertile couples seek any kind of fertility treatment in the absence of insurance coverage.

"Paying out of the pocket, in the absence of adequate health insurance, is not a viable option for many. Hence, majority of infertile couples are compelled to stay away from fertility treatments. Sometimes people opt for loans which carry financial risks for the family and go through a lot of psychological and emotional trauma.

Hence, we strongly recommend that insurers must include intrauterine insemination (IUI), in vitro fertilization (IVF), or frozen embryo transfer (FET) in their products," Dr Dedhia said.

Dr Dedhia further said if the insurance company pays for infertility treatments, there will be standardisation and transparency in the system. According to the experts, fertility treatments are complex, hence, it needs a comprehensive insurance coverage.

Dr Ranjana Sharma, senior consultant, obstetrics and gynecology, Indraprastha Apollo Hospitals, said infertility commonly occurs due to an underlying disease such as endometriosis, pelvic inflammatory disease, ovarian failure.

It is also a consequence of several factors such as conceiving after the age of 35 years, stress and smoking.

In many cases, insurers refuse to cover treatment of even these underlying diseases if there is accompanying infertility, she said.

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MOTOR INSURANCE

It is not mandatory to buy car insurance from auto dealer – DNA – 22nd April 2019

While buying a new car or a two-wheeler, most of us would have purchased the insurance too from the auto dealer. It is convenient to buy the vehicle and the insurance (which is mandatory) from the same place. Especially if the dealer is also helping you with the loan process. And when offered discounts and other benefits like free servicing or free car-wash, nobody would say no to the insurance.

But if you did some research with an independent insurance broker or an aggregator, you would get

better rates. Or you would be saved from buying an expensive insurance with add-on covers that you may not need.

Strong distribution Auto dealers are one of the biggest distribution channels for insurance companies when it comes to retail motor insurance. According to Rajive Kumaraswami, MD and CEO, Magma HDI General Insurance, the company is looking to increase its distribution tie-ups with auto manufacturers like Maruti and Mahindra & Mahindra for passenger vehicles. It already has a tie-up with Tata Motors for commercial vehicles. "Customers buy the car and the insurance together from the manufacturer because it is convenient. We offer the same discounts on all the platforms that we sell insurance,'' he says.

Auto dealers charging higher rates for insurance was the case a year ago, but following the Motor Insurance Service Provider guidelines the rates have moderated, says Sharad Mathur, senior vice-president, SBI General Insurance. Now auto dealers are regulated by Insurance Regulatory and Development Authority of India (Irdai) and there are rules regarding the pricing of the insurance offered through dealers.

For SBI General, about 85-90% of the business comes through top dealerships like Maruti, Mathur adds. Motor insurance cover being a prerequisite for the registration of a new vehicle, typically, customers buy a motor insurance policy from automotive dealers while purchasing a new vehicle, says Anurag Rastogi, member of executive management, HDFC ERGO General Insurance. "The renewal of the policy, in the subsequent years, too, is done through the same dealers as customers are mostly in contact with them for servicing their vehicles,'' he adds.

Perception or fact? According to Mathur, there is a perception that auto dealers charge additional premium, but in reality the price is higher because of add-on covers.

"An insurance agent or aggregator would give a comprehensive insurance with own damage and third-party cover. But an auto dealer would give add-on covers like return to invoice, and so on. It is true that customers may not need all the add-covers. In that case you can reduce the premium by opting out of these,'' Mathur adds.

But in most cases customers are generally unaware that they have an option of declining the comprehensive motor insurance offered by the dealer, points out Devendra Rane, founder and chief technical officer, Coverfox.com.

"The car/bike dealer bundles insurance in the total price payable by the customer for the vehicle. People are free to buy an insurance plan as per their requirements from the open market. One can just go online, compare various available options and buy the best-suited plan from an online broker or web aggregator. Buying online can help save big on their insurance premiums.''

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Agreeing that the motor insurance policy sold by the dealer could be loaded with various add-ons, Rane says, "Some of the offered riders may or may not be useful, but the customer does not have a say in what he/she wants. On the other hand, buying insurance online gives the customer complete freedom of choosing the add-ons he/she wants to attach to his base comprehensive motor insurance policy."

In fact, just as it is possible to buy accessories at a lower price at a multi-branded showroom, similarly, customers can often get better value for money by comparing the price the insurance on other platforms, says Sajja Praveen, motor business unit - head, Policybazaar.com.

"The saving can be as much as Rs 10,000 on the lower side to as much as Rs 30,000-40,000 depending on the size and value of the car. Most of the time the discounts offered by the auto dealers are pre-determined. The dealers may say they are giving you discount on the insurance, but your policy document will not say so. The dealer may also say that along with insurance they can offer you extended or cashless insurance. But the fact is that the cashless option is something the insurance company offers, and not the dealer or agent. Extended warranty is the only added benefit the dealer is able to offer,'' he says.

With the long-term third party insurance (three years for four-wheelers and five years for two-wheelers) now made mandatory, the price of the insurance has become critical for customers. Hence, it is important to look around and compare prices before you select the insurance.

To buy motor insurance, customers need information such as chassis number and engine number. But it may be difficult to get this beforehand from the dealer, which is another reason why customers prefer to buy the insurance bundled with the vehicle from the dealer, Praveen adds.

Precautions to keep in mind One must keep an eye out on what is being offered, be it from a car dealer or online. "The best thing to do is to ask the dealer to separate the price of insurance from the quoted price and get a complete breakdown which shows the cost of insurance,'' says Rane.

Do ask for details of the insurance company along with the additional add-on covers that are attached to the policy. Next, one should log on to an online broker or web aggregator portal and compare all available plans. It is only when one is truly satisfied that he/she is getting the best possible deal, only then should the policy be purchased.

LOOK BEFORE YOU BUY Compare price of the insurance offered by the auto dealers as well as insurance brokers and aggregators Avoid add-on covers that are not relevant for your vehicle as this will push up the cost of the insurance Benefits like cashless insurance is provided by the insurance company irrespective of whom you buy insurance from.

(The writer is Priya Nair.)

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How to prevent fake motor Insurance policies - Deccan Herald – 21st April 2019

Cheating customers with fake insurance policy has been a big menace, of late, for the insurance industry. The complex nature of insurance transaction processing, including the extent of reliance on third party service providers, makes insurance companies highly susceptible to fraud within and along its value chain. This coupled with a lack of awareness and consideration of insurance being a dead investment by the customers, makes them easy prey for the fraudsters.

Now with the recent rule, where 2-wheeler owners have to purchase third-party policy for a period of 5 years and private car owners have to purchase it for 3 years in addition to own damage policy, the premium slab for vehicle insurance has increased drastically for the consumer. This has given fraudsters

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a hot ground for perpetrating the sale of fraud policies to unsuspecting customers, since these are offered at much lower premiums as against the actual cost of a genuine policy. fraud trends have been noticed across the country and several FIRs have been lodged against such fraudsters in large numbers in cities across West Bengal, Maharashtra, Telangana, Karnataka, Tamil Nadu, Delhi, UP, Gujarat, and Kerala to name a few.

How to prevent oneself from being tricked

In India, since a third party motor insurance is made mandatory by law, it is still the most common form of general insurance that people buy. And since customers are not aware on the details of the policy offering and rather consider it to be a mere formality along with other documentation, they easily get tricked by fraudsters. These fraudsters edit genuine policy copies previously issued by insurance companies, to generate totally fake policies in the names of the new customers. These same policies are then shared with both the customers and the RTO. Not only is this unlawful, but also puts the customer in a poor financial situation in case of an accidental exigency, even more so in case of third party life/property damage where the compensation amounts can run into crores.

All this can be avoided if the customer takes a few prudent steps at the time of policy purchase itself, which can be summed in the following 6 easy steps:

One must always contact the insurer directly and confirm the insurance policy information. This can be done by writing an email to the insurance company or by calling its customer care number or by verifying the policy at the insurer’s website.

Request for valid receipts These days insurance policies come with QR codes. These QR codes help one to verify the authenticity of the insurance policy. All that has to be done is to scan the image of the QR code using a QR reading apps on smartphones.

One must always take some time to read and understand their insurance policy, to not only check the credentials but also to understand the policy coverage details.

Fake insurance policies can also be avoided if one buys policies directly from the insurance companies or from authentic intermediaries officially recognised by them.

One must pay the premium online or through cheques or credit card, so as to ensure that the premium is deposited with the insurance company itself.

The amount of money spent in premium might be very less as against any future contingency that might arise out of an accidental situation hence as prudent a customer one must ensure buying genuine policies. Insurance is all about transferring the risk to an insurer so that it takes care of any financial distress faced by the customer, albeit it is indeed transferred to it and not to some fraudulent trickster. Staying aware of such trends and taking preventive measures to ensure the validity of the motor insurance policy initially itself is hence the most advisable step. Be sure, be secure, buy genuine insurance.

(The writer, Sanjeev Dwivedi Head, Investigation and Loss Mitigation Team, Bajaj Allianz General Insurance)

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CROP INSURANCE

Insurers sit on Rs 530 crore farm insurance pay, further stoke crisis – Hindustan Times – 26th April 2019

Insurance companies owe hundreds of crores of rupees to farmers in crop-insurance claims, stoking farm

distress and prompting the government to impose steep fines on insurers for the first time, official data

reviewed by HT show.

Under a new rule introduced in October 2018 (which took effect in January 2019), insurance companies

will have to pay fines for delaying payment of crop-insurance claims. These claims have become a

political issue amid an agrarian crisis and the ongoing parliamentary elections.

Enforcement of this new rule governing the Pradhan Mantri Fasal Bima Yojana (PMFBY) — the flagship

subsidised farm insurance scheme of the current government — has revealed the magnitude of the

problem: outstanding claims owed to farmers amounted to nearly Rs 530 crore until March 31, 2019.

To be sure, some of this amount may have been paid out by the companies since.

About “eight companies” have now been slapped with a fine of Rs 16 crore for various delays, a person

familiar with the matter said on condition of anonymity. An insurance company must now make

payments within 30 days of receiving all claims-related data, failing which penalty at a rate of 12% of the

outstanding is levied.

Delay in paying compensation for crops ruined by weather shocks can have a domino effect on the

fortunes of individual farmers and the overall economy.

Such delays can push millions of farmers into poverty, leaving them with little money for the next sowing

season. Also, such delays hamper farmers’ ability to service their agricultural loans, pushing them closer

to the brink of default. Farm insurance is compulsory for any farmer taking an agricultural loan.

Such vicious cycles of delayed payments, among other issues, were one of the factors behind massive

protests by farmers in the last two years to demand farm loan waivers; political parties responded by

announcing loan amnesties for farmers ahead of the 2019 elections.

The outstanding amount of Rs 530 crore accrued over the past four sowing seasons between the kharif or

summer sown season of 2016 to the winter sowing season of 2017-18, points to entrenched practice of

delaying payments.

Farmers under PMFBY have to pay between 1% and 2% of the total premium, depending on crops and

sowing season. The rest is shared between the Centre and states on a 50-50 basis. To be sure, farm

insurance is crucial in a country where crops are vulnerable to drought, unseasonal rains, even pest

attacks. Nearly 54% of the sown area lacks irrigation cover and 12 million hectares, on average, suffer

annual weather shocks.

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Official data show that the voluntary enrolment of farmers without any farm loan has remained steady

since the launch of the PMFBY in 2016, indicating that farmers do find it useful.

A majority of those fined are public-sector insurance companies since they have, between them, a

majority share of the farm insurance business.

The fines, aimed at ensuring compliance of insurance companies with making timely payments, are one

of the two changes introduced under the revised guidelines of the PMFBY last year. The second provides

for penalizing state government for their share of the delay.

One partly public-owned insurance firm, Agricultural Insurance Company of India Ltd (AICIL), said it was

examining the penalty slapped on it.

“It is a positive step, responsibility should be fixed. But penalty has to have a valid reason. Claims cannot

be cleared just because data has been cleared by states. There can be discrepancy in claims data sent by

states or consequential delays from state governments, who often cause delays in releasing premium,”

said Rajeev Chaudhary, the chief risk officer of AICIL.

Currently 18 companies are empanelled to offer farm insurance. Of these, five are state-owned. The share

of crop insurance business with state-owned firms is 52%.

According to Ashok Gulati, an economist with think-tank ICRIER, if the PMFBY scheme is to achieve its

most critical goal — timely payouts to farmers — it will have to rely on high-end technological fixes, from

drones to even a new constellation of satellites, for accurate crop damage assessments, which is the key

to faster processing of claims.

(The writer is Zia Haq.)

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SURVEY

Malaria-related claims decline on rise in awareness: Insurers - The Hindu Business Line – 25th April 2019 The incidence of malaria across the country seems to be on the decline, going by the claims data of general insurers, although other vector-borne diseases are on the rise. According to claims data by SBI General Insurance and Bajaj Allianz General Insurance on World Malaria Day, claims for malaria went down by 15 per cent last year.

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“Bajaj Allianz General Insurance has noticed a 15 per cent decrease in claims related to malaria in 2018-19, compared to the previous fiscal,” the private sector insurer said, echoing the World Malaria Report 2018 by the WHO, which had reported a 24 per cent decrease in malaria cases. For SBI General Insurance, the number of malaria-related claims rose marginally to 500 in 2017-18 from 496 in 2016-17. However, it fell to 487 in 2018-19. Its internal findings reveal that the highest number of claims paid has been to millennials in the age group of 18 years to 35 years, but the distribution percentage has fallen to 45.5 per cent from 52.8 per cent. “The disease is more prominently seen in non-metro cities, where the percentage of claim is 52 per cent compared to metros, where 48 per cent claims are seen,” said SBI General Insurance, adding that the major factor for this is that awareness of hygiene is more in metros than in non-metro cities. Among the States, Uttar Pradesh reported the highest number of claims, as well as amount for malarial fever-related claims, followed by Madhya Pradesh and Gujarat. Bajaj Allianz General Insurance also said that a rise in awareness seems to be the reason for the fall in malaria cases, but highlighted that claims for other vector-borne diseases are rising. Claims for Japanese encephalitis rose by 125 per cent, while for chikungunya it is 45.5 per cent. Meanwhile, claims for rickettsial diseases also rose by 35.8 per cent, typhus and louse-borne relapsing fever by as much as 30 per cent, and dengue fever by 17 per cent. (The writer is Surabhi.)

Bhubaneswar pips 14 other cities to top in term insurance ownership: Study - Business Standard – 24th April 2019 Bhubaneswar, the number one Smart City has aced the pan-India ranking of cities in term insurance

ownership and scored over the national average in protection against future uncertainties.

In its 'India Protection Quotient Survey', leading private

insurer Max Life places Bhubaneswar over 14 other

cities in owning term insurance, with 64 per cent of its

population aware of the cover's benefits. The survey

covering 4,566 respondents across six metros and nine

Tier-I cities, sought to fathom the country's positioning

in terms of life and term insurance ownership.

IPQ manifests the degree to which Indians feel protected

from future uncertainties, on a scale of zero to 100.

Bhubaneswar’s protection quotient of 36 out of 100 betters the national average of 35 for urban India,

though Delhi leads the pack with an IPQ score of 40. Odisha's capital city outranks Jaipur, Bengaluru,

Kolkata, Bhopal, Pune and Ludhiana on this count. Also, Bhubaneswar boasts of the highest proportion of

term insurance ownership, with 40 per cent of its respondents in the survey having taken such a plan.

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Bhubaneswar's growing clout in IT and education has led to the city's ascendancy in rankings.

“By virtue of Bhubaneswar being an emerging IT and education hub, the city ranks at par on the life

insurance protection and knowledge index of our ‘India Protection Quotient Survey’. This rapidly

developing city has outperformed other leading cities such as Delhi, Mumbai, Bengaluru, etc, in life

insurance offtake. Surprisingly, 50 per cent of those insurance owners have term insurance, which is the

highest compared to any other city in the country. Having said that, there is definitely scope to increase

the number of insured individuals in Bhubaneswar as term insurance is the cheapest and most

fundamental form of financial protection. We’re certain that the survey’s compelling findings will help

bring about change in the underlying attitudes and overall behavior of people around life insurance”, said

V Viswanand, deputy managing director, Max Life Insurance.

In the 'Knowledge Index', the degree to which Indians are aware of life insurance products, on a scale of

zero to 100, Bhubaneswar has fared well with a score of 40, exceeding the national average of 39. Delhi

clocked the highest score at 58 with Ludhiana languishing at the bottom (with a score of eight).

Seventy eight per cent of Bhubaneswar's residents own life insurance, making it among the more insured

cities in the country. Sixty seven per cent of the city's women possess life insurance products as opposed

to 74 per cent for men. In term insurance ownership, women rank higher with 27 per cent compared to

23 per cent in case of men.

Despite a slew of positives, Bhubaneswar is not financially geared to deal with critical illnesses as 54 per

cent of the people feel their savings would last less than a year in case such an ailment struck.

Nationwide, people are grossly under prepared to cope with financial instability caused by life events and

India’s ‘Financial Protection Quotient’ is pegged at a mere 35 on the scale of 100. The low offtake coupled

with lack of awareness and ownership of term insurance is contributing to people feeling under

protected.

(The writers are Nirmalya Behera & Jayajit Dash.) Most Indians in middle, high income groups save for retirement, says report – Mint – 23rd

April 2019

With no significant social security provisions such as

a state-sponsored pension, most Indians in the

middle- and high-income groups seem to be saving

up for their retirement on their own. A recent report

by Aegon Center for Longevity and Retirement, titled

The New Social Contract: A Blueprint for Retirement

in the 21st Century, said India leads the way in

retirement readiness among the 15 countries

surveyed across Europe, the Americas, Asia and

Australia. The survey was conducted among middle-

and high-income individuals.

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“A combination of shorter careers, lack of social security, nuclear families becoming more common which

means reduced dependence on children, increasing life expectancy is pushing Indians to focus more and

more on retirement," said Vishal Dhawan, certified financial planner and founder, Plan Ahead Wealth

Advisors, a financial planning firm.

India is the only country to score more than 7.3 on the Aegon Retirement Readiness Index (ARRI) against

a global average of 5.9. ARRI, a part of the Aegon Retirement Readiness Survey 2018, ranks retirement

readiness on a scale from 0 to 10. A score between 8 and 10 shows high readiness and a score between 6

and 7.9 shows medium level of readiness. Anything less than 6 shows low preparedness.

“Indians are now more aware that they may not get financial support from their children and this is

motivating them to save more. This was not the case some years ago when children felt it was their

responsibility to take care of their parents in their old age," said Shweta Jain, certified financial planner,

CEO and founder, Investography Pvt. Ltd, a financial planning firm.

Retirement ready

The index ranks BRIC nations China and Brazil behind

India, at second and third places, respectively. The

report said 47% Indians feel that the future generations

of retirees will be better off in their retirement

compared to the current retirees with the pension

systems in the country improving gradually.

While globally, 30% of the retirement funding comes

from own savings and investments, in India as much as

half of it is expected to come from this source. Globally,

24% of the retirement income is expected to come from

the employer and 46% from the government, but

Indians expect 30% from their employer and just 24%

from the government.

As much as 55% of working people in India are saving

for retirement regularly compared to 39% globally.

Also, about 26% Indians are saving occasionally and

9% are not saving currently but do plan to do it in the

future. Just 1% of working Indians have never saved for

retirement and do not plan to do so. Retirement planning

Financial literacy is playing a key role in getting Indians retirement ready. Most people, as much as 74%,

look at retirement with a positive outlook.

Financial planners stress on the importance of having a comprehensive plan in place to ensure you enjoy

a comfortable retirement in terms of your finances. Having a plan allows you to understand how much

you will need to save and invest in order to accumulate sufficient retirement corpus.

As many as 28% of working Indians have a written financial plan compared to only 13% globally.

According to the report, only 33% working Indians know the role of the three important parameters in

retirement planning—compound interest, inflation and risk diversification. However, only 22% of the

millennials surveyed in India knew what the three parameters meant.

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“Indians tend to speak about money more openly than residents of other countries. At least the previous

generations did so and seeing younger children spend time in their fathers’ businesses was normal.

Today, that is changing, so while people who are looking to retire in the next 15 to 20 years may be better

prepared, the younger adults in their 20s are not prepared at all," said Jain.

Dhawan said lack of social security and pension system and the desire to be financially independent is

driving more and more people to plan for retirement well in advance and is giving the option to explore

various investments and saving options.

(The writer is Disha Sanghvi.)

Not happy with your health insurance policy? Here's what you can do about it - The

Economic Times – 22nd April 2016

Health insurance buyers are not a happy lot. An online

survey conducted by ET Wealth earlier this month revealed

that almost half the health insurance buyers (48%) are not

satisfied with the features and benefits of their policies.

The dissatisfaction levels are higher in the higher age

groups: those aged 65 and above have the highest number

of dissatisfied policyholders—67%. Similarly, when it

comes to claim settlement experience, almost 70% of those

in the 60-64 age brackets are dissatisfied.

We have listed below the survey’s major findings, which

show widespread discontent among policyholders, and suggested ways to better handle customer issues:

High dissatisfaction

At 48%, the number of people dissatisfied with their policies is too large to be ignored by insurers. The

higher the age group, the larger the number of dissatisfied people. This is troubling because older people

are likely to use their health policies more frequently.

The survey results demonstrate that those who spent time on ascertaining their insurer’s reputation

before buying the policy were better off compared to those who relied on their agents’ recommendation

or bought a policy based on lower premium.

Almost half the policyholders are not satisfied

Dissatisfaction levels rise with age

Not surprisingly, dissatisfaction level amongst older age groups is much higher. These age-groups bear

the brunt of renewal premium hikes as well as restrictions like co-pay and disease-wise capping.

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SCRUTINIZING A POLICY PROPERLY, INSTEAD OF LEAVING IT TO INTERMEDIARIES OR BLINDLY

SIGNING DOCUMENTS WILL SAVE YOU A WORLD OF TROUBLE IN THE LONG-TERM. BUYING A POLICY

SHOULD NOT BE A HURRIED EXERCISE IN ORDER TO CLAIM SECTION 80D TAX BENEFITS. THE KIND

OF POLICY YOU BUY HAS LONG-TERM IMPLICATIONS FOR YOU AND YOUR FAMILY. INSURERS SAY

THEY ARE DOING THEIR BIT TO HELP PEOPLE MAKE AN INFORMED CHOICE.

On a 0-5 scale, how satisfied are

you with your insurer?

Two out of three respondents

have rated their insurance

company average or below

average—three or less. Just about

10% are totally happy with their

insurers.

Do not treat these processes as mere formalities that you need to get done with, even if your

intermediary says so. “The insurance industry also offers the free-look period. The customer can cancel

the policy if he/she is not satisfied with any aspect of the policy with full refund of premium during this

period,” says Sanjay Datta, Chief, Underwriting, Claims and Reinsurance, ICICI Lombard. A timely check

after you receive all policy documents will ensure that you do not end up with an unsuitable cover.

Higher renewal premiums

Steep hikes in renewal premium topped the list of policyholders’

complaints. “Hike in renewal premiums is a reality. It is linked to

inflation as is the case with any other product or service. With

increasing cost of healthcare in the country, the premium rates also

need to be revised periodically to offset the inflation,” says Ashish

Mehrotra, MD and CEO, Max Bupa Health Insurance.

In 2013, the Insurance Regulatory and Development Authority of India abolished claim-based loading—a

practice where renewal premiums for policyholders who had filed a claim in the previous year were

raised. Now, insurers are allowed to hike premiums based on their claim experience for a particular

portfolio or age-group, or to adjust for inflation.

Consumer activist Jehangir Gai has strong words for the industry and the regulator. “In some cases, there

has been a fourfold increase in premium—from Rs 20,000 to Rs 80, 000,” he points out. Typically, the incidence of claims is higher in older age groups as that is when people tend to fall ill. “They collect the

premium while the policy is profitable and then when the person is old and the policy is likely to become

onerous, they raise the premium making it unaffordable, so that the insured himself discontinues the

policy. It is not the industry but the regulator who has to address the issue,” says Gai.

On their part, policyholders should not look to buy policies at an advanced age when there is a greater

likelihood of them falling sick. “Once the youngsters start viewing the health insurance policy as a risk

cover, and purchasing it at a young age, there would not be such a steep hike in premiums that is

unfortunately seen now,” says Datta.

37

Bought policy based on agent’s advice

Less than 40% of those who heeded an agent’s advice to purchase the policy are satisfied with their policies’

features. Be careful, intermediaries may be guided by commissions rather than your requirements.

Not satisfied: 61.4%

Satisfied: 36.8%

Bought policy based on insurer reputation

More people who bought policies based on the insurer’s reputation are satisfied, compared to those who

went by agents’ advice.

Not satisfied: 42.1%

Satisfied: 57.9%

Claim settlement experience of those who bought policy based on cashless facility

While cashless hospitalisation is a much sought-after facility, it has not made the claim process any better

for most respondents.

Not satisfied: 58.3%

Satisfied: 41.7%

Bought policy based on low premium

Being thrifty didn’t work out well for a majority of the respondents. A cheaper policy may be lighter on the

pocket, but it may also fail to meet your expectations.

Not satisfied: 57.3%

Satisfied: 42.7%

Claim settlement experience of those who bought policy based on insurer’s reputation

A majority of the people who bought their policies based on the insurer’s reputation have had unsatisfactory

claim settlement experiences.

Not satisfied: 55.8%

Satisfied: 44.2%

Renewal premiums also go up as you grow older. For instance, when an individual turns 36, she moves

from the 30-35 age brackets to 36-40 bracket, which attracts higher premium. When you buy a health

insurance policy, it needs to be renewed for the lifetime, although it is an annual contract.

Therefore, it makes sense to think ahead while comparing policies at the purchase stage. “It is very

important to check the next 10 years’ premium–two five-year age slabs. If the policyholder is buying the plan at the age of 35, then she should look up the insurer’s premium chart up to the age of 45 or 46,” says

Bhakti Rasal, a financial planner.

Poor claim settlements

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Our survey showed that almost 60% of the people who filed claims were dissatisfied with their

experience. Almost 65% of the unhappy respondents blame it to partial claim settlement due to various

exclusions. About 42% said they were unhappy because of the delay in processing of claims.

Surprisingly, dissatisfaction was comparatively lower in the 65 and above age bracket. Perhaps, because

those in the advanced age groups tend to factor in the various caps and are aware of the policy

restrictions.

Not satisfied with claim settlement process

Dissatisfaction is relatively lower in the 65 and above

age bracket. This could be because the people in this age

group are better aware of the various policy exclusions

and restrictions.

“Too many people being unhappy with their insurer’s

claim settlement record is quite alarming and needs to

change swiftly,” says Datta. But bad claim settlement

experience could also be attributed to the policyholder. As a policyholder, you need to be transparent

about any history of illness to avoid claim rejection on this ground.

Why people are dissatisfied with their claim

settlement process

Partial claim settlement has been policyholders’ top

grievance. Insurers need to improve their

communication and policy buyers need to

understand their policies’ terms and conditions to

avoid disappointment.

Reasons for claim rejection, partial settlements

An overwhelming number of claims have been rejected

because they fell in the exclusions category. This again stresses the need for better communication and greater

awareness.

Most insurers cover preexisting illnesses only after a

waiting period ranging from 1-4 years, depending on

the ailment. “Maintaining transparency with

communication of policy benefits, customers being up

front with pre-policy declarations, defining service

level turnaround time, which will be adhered to, shall

all help us in improving customer satisfaction levels,”

says Datta.

Being aware of exclusions can help reduce the scope for dispute. Irdai has standardised a list of

exclusions that insurers must adhere to and any deviation can be taken up with the insurer and grievance

redressal forums. But, at times, these exclusions are inserted at the time of policy renewal. “Policyholders

assume that the contract will remain unaffected when they renew. But that is not the case. They face

issues when exclusions are included unilaterally at the time of renewal,” says Sikdar.

39

The 2017-18 annual report of the Executive Council of Insurers, which facilitates the insurance

ombudsman offices, highlights the lack of clarity in the terms and conditions of health insurance policies.

It specifies ‘reasonable and customary charges’ as one of the clauses that need ‘proper’ interpretation.

“Pre-existing diseases should be specified on the schedule of the policies so that the insured is aware of

the exclusions in the terms and conditions of the policy,” says the report.

Key concerns of policyholders

Not surprisingly, steep hikes in renewal premiums

are most policyholders’ chief concern. Insurers

need to make reasonable premium revisions. If

possible, policyholders should avoid policies with

restrictions, suggest experts.

You could also look at the incurred claims ratio

(ICR) of a health insurer in the individual health

segment to get an idea of the company’s claim

settlement record. A ratio of 75-85% is

considered healthy. “The incurred claim ratio is an important indicator. I would buy from insurers who

have an ICR in the 70-100% band,” says Kapil Mehta, Co-founder and CEO, Securenow.in. Do remember,

however, that ICR is not the same as claim settlement ratio.

Consumer activists also believe that insurers tend to service the claims of group customers better at the

cost of individual policyholders. “Health insurance regulations must be amended so that the group

insurance claims cannot be used to cross-subsidise the individual claims,” says civil activist Gaurang

Damani, whose petition in the Bombay High Court had triggered a revision of health insurance

regulations in 2013.

Option to port policies

Health insurance policyholders are allowed to switch insurers and port their policies, if they are

dissatisfied with their existing insurers. They don’t lose continuity benefits of pre-existing diseases (PED)

cover, if they port their policy. The Irdai introduced health insurance portability in 2011.

However, 27.12% of the respondents were not aware of this feature. Policyholders can also approach the

insurance ombudsman for grievance redressal. However, the ET Wealth survey found that over 70% of

those who were dissatisfied with their insurer’s claim handling did not approach the insurance

ombudsman.

Not satisfied, but didn’t switch

insurers

Despite Irdai allowing health

insurance portability since 2011, 41%

of respondents either didn’t know

about its existence or were not clear

about the process to be followed.

More than 77% found the process too complex and time-consuming, while close to 42% were not even

aware of the option or the process. Instead of giving up after a claim rejection or service deficiency,

40

policyholders should utilise all options at their disposal to seek a redressal. If you are disappointed with

the ombudsman’s decision, the final option is to approach the consumer courts.

What policyholders want

New-age insurers in particular present health and wellness benefits as a carrot to attract healthy and

health-conscious individuals. While such benefits can be useful, unambiguous terms and conditions and

restrictions is what policyholders really ask for.

Close to 62% of the policyholders wanted their policy documents to explain restrictions and exclusions

up front in a simple manner. OPD benefits (50.71%) and wide cashless hospitalisation network (50.32%)

too score high on the list of most-wanted parameters, followed by no room-rent sub-limits (47.47%) and

loyalty discounts for long-term customers (47.21%).

What makes an ideal health insurance policy?

The priority for most policy buyers is not extra

features—OPD benefits, no room rent caps,

etc.—but simple and lucid communication of

restrictions and exclusions in a policy.

The insurance ombudsman annual report, too,

emphasises the importance of better

communication. “Insurers should consider

lower pricing for people who buy health

insurance early (and continue to be covered

over long-term).

Currently, everybody is charged the same

premium, irrespective of when they bought the insurance first,” says Mehta.

Some companies have started offering such discounts in some of their products. “We offer a 10%

discount for life, if the policy is bought before the age of 35. This is a good way of keeping your premiums

low even at higher ages: buy the policy early and maintain it for a longer time,” says Mehrotra.

Health insurance regulations allow insurers to reward policyholders for early entry, continued renewals

and favourable claims experience. Irdai’s proposed standard product construct also provides for

incentivising early entry.

The graphics show the findings of an online survey conducted by ET Wealth earlier this month. Of the 1,067

respondents, views of 771, who had health insurance, have been considered. Some of the responses may not

add up to 100 because of multiple choices.

(Data analysis by Narendra Nathan and Ramanatha Pai)

TOP Source

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INSURANCE CASES

Supreme Court denies medical insurance claim to man – The Hindu – 26th April 2019

Noting that a contract of insurance involves “utmost good faith”, the Supreme Court has denied medical insurance claim of a man who did not disclose past history of a disease he was suffering while buying the policy. A Bench of Justice D.Y. Chandrachud and Justice Hemant Gupta said: “The failure of the insured to disclose the past history of cardiovascular disease was a valid ground for repudiation.” Manish Gupta had obtained a mediclaim policy from Life Insurance Corporation of India (LIC) in June 2008. The policy was issued under the category of Non-Medical General (NMG) for a sum of Rs1.6 lakh. The proposal form required a disclosure of health details and medical information. Among them was whether Mr. Gupta had suffered from cardiovascular disease like palpitations, heart attack, and stroke or chest pain. He denied having any of the above ailments in the form. The next year, he submitted a claim after undergoing a Mitral Valve Replacement (MVR) surgery. The claim was denied by LIC on the ground that he was suffering from a pre-existing illness. ‘Pay Rs2.21 lakh’ When challenged LIC’s decision before the District Consumer Disputes Redressal Forum, Ambala, which pass an order in his favour. The District Forum directed LIC to pay a sum of Rs2.21 lakh with interest. This order was concurred by the State Consumer Disputes Redressal Commission and later by the National Consumer Disputes Redressal Commission. LIC subsequently moved the apex court. Before the top court, LIC submitted that the Health-plus policy falls under the NMG category where the insured is not subjected to a medical examination before the issuance of the policy. It argued that the onus was on the insured to provide material particulars of his health since no medical examination was mandated. Mr. Gutpa argued that he was not suffering from any other ailment and that he cannot be faulted for any noting which has been made by the doctor in the course of treatment. But the Bench pointed out that the treatment record indicates that Mr. Gupta was operated for MVR, the nature of the diagnosis was rheumatic heart disease.

42

Dismissing the orders of the consumer courts, the Bench said they have made a fundamental error in allowing the claim for reimbursement of medical expenses in the face of the uncontroverted material on record. “The documentary material indicates that there was a clear failure on the part of the respondent to disclose that he had suffered from rheumatic heart disease since childhood. The ground for repudiation was in terms of the exclusions contained in the policy,” it said. (The writer is Soibam Rocky Singh.) ‘Insurance company can’t decide patient’s line of treatment’ – The Times of India – 25th

April 2019

Only doctor and not the insurance company can decide the line of the treatment give to patient. This terse observation was made by a consumer court here, which ordered the insurance firm and third-party administrator (TPA) to pay the insured amount to a citizen. Complainant Bhanvarlal Purohit, who owns a farsan shop in Pratapnagar, had claimed an insurance amount of Rs 19,457 after his wife Pushpa Purohit was discharged from Dadaji Hospital in January 2017. Pushpa was suffering from cervical spondyolis for which she underwent treatment for three days at the hospital. A month later the TPA Paramount Health Services and Insurance rejected Purohit’s claim on the grounds that ‘no active line of treatment was given during hospitalization’. ‘Treating doctor’s opinion more truthful than TPA’s’ Purohit’s lawyer Montu Pandya said, “During hospitalization, the doctor prescribed x-ray, laboratory tests, several medicines, injections and consulting a physician. But the insurance company claimed that such treatment was not needed for treating cervical spondylosis and therefore they rejected the claim giving reason that no active treatment was given.” “She was admitted as indoor patient for examination and observation as she complained of cervical pain,” said Pandya. Purohit then approached the Vadodara District Consumer Disputes Redressal Forum in August 2018 against insurer National Insurance Company and the TPA. He submitted the discharge report along with doctor’s certificate that mentioned Pushpa’s health condition and the treatment offered to her. However, the court ruled that ‘No insurance company can decide the line of the treatment to be given to a patient, only doctors can decide about the treatment.”

Source

43

The forum upheld the evidence and observed that the TPA has given its opinion after examining the case papers only. “Opinion of the doctor who treated patient is more truthful than the TPA’s opinion which is based on examination of case papers,” the forum stated. The insurance has been asked to reimburse Bhanvarlal’s claim along with 8% interest and compensation of Rs 3,000. (The writer is Jay Pachchigar.) Unseasonal rain damages crops in 55,000 acres across Telangana – The Times of India –

22nd April 2019

Unseasonal rain and hail storms have destroyed crops in over 55,000 acres across Telangana, spurring the government to ring alarm bells and take stock of the situation in the hinterland. Paddy

and mango crop were the worst hit, according to initial estimates, and chances of more damages in store if the rain continues for a few more days. “The exact loss could be more, but our preliminary information says paddy has been damaged in about 30,000 acres, mango in 20,000 acres and other vegetable crops in a a few thousand acres,” principal secretary, agriculture, C Parthasarathi told TOI.

Senior agriculture officials said the damage was extensive as mango tress was flattened due to the impact of hail and strong gales. Banana, papaya, sweet lime, green chilli, lime and other horticulture crops were also damaged, the officials said based on initial estimates from affected areas in Peddapalle, Mancherial, Siddipet, Jagtial, Rajanna-Sircilla and other districts. A worried chief minister K Chandrasekhar Rao has asked district collectors to help farmers make proper assessment of crop damage and inform the loss to insurance companies within 72 hours. He also asked the officials to ensure all support was extended to the farmers. ‘Farmer must intimate insurance cos of crop damage within 72 hrs’ Under the Pradhan Mantri Fasal Bima Yojana (PMFBY), hailstorm is covered under localised calamities and a insured farmer has to intimate crop damage to the respective insurance company through the toll-free numbers within 72 hours. It is mandatory that the insurance company representative along with agricultural department official and the insured farmer visit the damaged field for assessing the percentage of crop damage due to occurrence of hailstorm,” Parthasarathi said.

Source

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Agriculture minister S Niranjan Reddy has directed marketing department officials to ensure harvested crop was moved to godowns, including National Bank for Agriculture and Rural Development one, on a war footing. In Hyderabad, the unseasonal rain brought the much-needed relief to denizens of the concrete jungle from simmering heat as temperatures plummeted. But the rain also brought with it woes of inundated roads and power outages. (The writer is Roushan Ali.) Insurance firm told to pay 2.35 lakh to farmer for crop loss – The Times of India – 21st April

2019

A district consumer forum directed the Agriculture Insurance Company of India (AIC India) to pay 2.35 lakh to a farmer who lost his crop during the drought. The farmer was rebutted by the insurance company for 'want of more information'. The Agriculture officer of Ranga Reddy district, meanwhile, was asked to pay an additional 20,000 as punitive damages for not responding to the farmers' problems despite serving notices. K Eshwaraiah, the 67-year-old complainant, submitted that he is an agriculturist and owns about half acre land at Pomalpally village in Ranga Reddy district. Out of his vast experience in agri-cultivation, he said that he had decided to cultivate maize crop during 2014-15. To be on the safer side, he said that he had got it insured against untoward incidents and natural calamities, including the act of God, with Agriculture Insurance Company of India, which comes under the Ministry of Agriculture, Government of India, by paying the requisite amount of 1,973. He claimed that he had clearly mentioned the type of crop and the area used to cultivate the crop. To his misfortune, he said that he had to sustain a heavy loss of the yield due to severe drought in his village. The complainant said that despite making several requests, AIC India failed to compensate him and he was forced to file a complaint. The representative of the Agriculture Insurance Company of India, meanwhile, in his written version submitted that Eshwaraiah's proposal form did not comply with the scheme provisions/requirements i.e. the crop sown certificate did not have the date of crop sown, which is a condition precedent as per the central government and cited it as the reason for not processing his claim. During the trial, the bench noticed that AIC India made no efforts either directly or through the concerned Mandal Agricultural Officer to return or seek information about the incomplete application.

Source

45

"The opposition party cannot shift its burden. It had an opportunity to return the application of the complainant at the instance for incomplete particulars which they haven't done. Having accepted the proposal now, they cannot turn around and contend innocence," said the bench. (The writer is Nirupa Vatyam.) Punjab govt bars release of vehicles without third party insurance involved in accidents –

The Times of India – 21st April 2019

The Punjab government has decided not to release vehicles involved in accidents resulting in death or injuries unless they have third party insurance cover or the owner furnishes "sufficient security" to the court, enough to pay compensation to the victims. Setting an example for other states, the Punjab transport department has notified that vehicles will be auctioned in three months, if either of these conditions are not met and the proceeds of auction will be deposited in claims tribunal for paying compensation. The department made the changes in the Motor Vehicles (Amendment) Rules on April 3, which is being seen as a major reform to rein in owners who don't renew third party insurance. Owners of more than 50% vehicles in India don't renew third party insurance, which is mandatory. This poses serious risk to victims of accidents involving such vehicles as the insurance companies don't pay them compensation. In many cases, the owners don't even have the resources to pay the compensation awarded by the Motor Accident Claims Tribunals. Prohibiting the release of vehicles involved in an accident resulting in death or bodily injury or damage to property, when such vehicle is not covered by the policy of insurance against third party risks taken in the name of registered owner or unless and until the registered owner furnishes sufficient security to the satisfaction of the court to pay compensation that may be awarded in a claim case arising out of such accident". (The writer is Dipak K Dash.) Health insurance fraud unearthed, 3 arrested - The Tribune – 20th April 2019

A major insurance racket has been unearthed with the arrest of three persons in Sonepat. The police said the accused used to contact cancer patients and get them insured. Following their deaths, they would file an FIR related to road accidents and claim the insurance amount. According to the special task force (STF) handling the case, the insurance scam is first of its kind in the country and employees of the PGIMS, Rohtak, are under the scanner. The accused not only got the contact details of these patients, many of whom were being treated at the PGIMS, but also managed to get treatment records deleted from the hospital records. As part of their modus operandi, they would get FIRs of accident registered in various police stations of the state and get the money in connivance with families of patients.

Source

Source

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According to the STF, a complaint was filed by Bharti Axa, an insurance company, to the DGP (crime) and the investigation was headed by Rahul Dev, DSP. The accused have been identified as Pawan Bhoriya, Mohit and Vikas. Bhoriya was the kingpin of the gang. “There is an apparent nexus of hospital authorities, insurance surveyors and families and the exact amount of the fraud is yet to be ascertained,” said Rahul Dev. An FIR has been registered against the trio and many unknown accused at the Civil Lines police station, Sonepat.

TOP

IRDA CIRCULARS

Updated List of Non-life Insurers is available on IRDAI website.

TOP

GLOBAL NEWS

Vietnam: Uninsured patients to face increased medical costs – Asia Insurance Review

According to a recent health ministry circular, new price ceilings have been set for over 1,950 medical

services in Vietnam effective next month. This translates to increased rates for medical services which will

directly impact patients without health insurance.

The Vietnam government intends to encourage citizens

to sign up for a state-sponsored national health

insurance programme with this new circular. However,

the circular’s provisions will only apply to public medical

centres.

The health ministry reported that 86.7% of the

population has already enrolled in the national health

insurance programme. The remaining 13.3% of the

population remains uninsured and most of them are said

to have above-average living standards. A hospital fee incurred by these uninsured patients is expected to

cover remuneration and salaries for hospital staff as well as surgery fees and other medical procedures.

According to Willis Towers Watson’s Asia Insurance Market Report 2018, the demand for healthcare has

grown in the past few years as the Vietnamese economy continues to grow. In line with contemporary

Source

Source

47

developments, Vietnamese insurers are starting to offer more sophisticated products to cater to customers

willing to spend more on better coverage. The non-life market grew by 12% in 2018 to reach a value of

VND19.8bn ($870m).

Indonesia: Insurers urged to offer multipurpose credit insurance – Asia Insurance Review

There are only a few general insurance companies working on

multipurpose credit insurance business in Indonesia, even

though this line has bright business prospects, says the executive

director of the Indonesian General Insurance Association

(AAUI) Dody Achmad SudiyarDalimunthe.

According to a report in Kontan, Mr Dody said, “Just look at

what Bank Indonesia (BI) noted, which is that multipurpose

loans grew by 12.8% year on year to IDR587.1trn ($41.8bn).

"Multipurpose credit insurance is very specific, so not many general insurance companies are engaged in this

line. Credit insurance underwriters must be able to analyse the debtors as is done by banks.

Despite having attractive prospects, Mr Dody admitted there were still obstacles in managing this business.

Based on AAUI data, last year credit insurance premiums grew 52.2% YoY to IDR7.86trn, fuelled by consumer

credit insurance.

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