Budget 2013: Insurance penetration in smaller cities

Insurers may be a little disappointed as the budget didn’t seek to make insurance more attractive by increasing the section 80C deduction limit of Rs.1 lakh, but what may cheer them up is that the finance minister has taken measures to increase the penetration of the sector from the supply side.

Higher penetration

In his budget speech, the finance minister, has allowed insurance companies to open up branch offices in tier II cities and below without prior approval from the Insurance Regulatory and Development Authority or Irda. “Insurers need prior approval of the regulator at the time of opening any office but that’s never been a major issue,” says G. Murlidhar, managing director, Kotak Mahindra Old Mutual Life Insurance Ltd. To this effect, the government will also set up at least one branch office of state-owned Life Insurance Corp. of India (LIC) and one state-owned non-life company—United India Insurance Co. Ltd, National Insurance Co Ltd, The Oriental Insurance Co Ltd or The New India Assurance Co Ltd—in all towns of India with a population of 10,000 or more by the end of FY14.

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How to Choose a Health Insurance Policy

Medical emergencies can strike anytime therefore insurance coverage is a must for everyone. When medical bills hit the roof, the best thing to have is a health insurance policy that offers you peace of mind. If you are looking to buy a health insurance policy, here are all the answers to your questions.

What is the minimum premium to be paid as per the plan?
You will need to pay premium according to your insurance plan and variant. But, you will need to find out the amount the insurance company will cover in case of medical treatment. If your treatment exceeds this amount, you will have to pay the difference.

What are the exemptions?
Some health insurance companies will not pay for regular checkups. Find out if the insurance company is ready to cover all costs. Do read up the policy documents and go through their FAQs for a better understanding.

What happens if I don’t make any claims in the particular policy year?
If you have an insurance agent, ask him/her about what happens if you have a claim-free year. Also read the documents or any kind of information that you may find important. Some insurers offer increase in the benefits amount / decrease in the regular premium in case of a claim free year.

Does it cover international travel?
If your job sends you out of the country every month, it is necessary to take travel insurance into consideration. Most insurance policies do not cover international travel. Those that do are available at a higher premium. If you travel a lot, you should opt for one that will cover international health problems.

What is the payment going to be like?
You need to find out whether you will have to pay the hospital first and be reimbursed later or whether the company offers a cashless hospitalisation. If the company says it will reimburse you, it shouldn’t be a problem unless you can’t get all the money in place on time.

Health insurance frauds: Experts warn of sharp rise in mediclaim scams

Nine out of ten health insurance frauds in country's insurance sector occur in the mediclaim policy segment and there is a need to adopt measures to reduce the trust deficit between insured and insurer to curb the scams, experts have said.

"In insurance industry, number of grievances received or number of frauds committed is an indicator of growth trend of particular segment. In entire insurance sector, 90 per cent of frauds and grievances come from health policies," said Niraj Kumar, General Manager, Oriental Insurance Company.

He was addressing a seminar on health insurance at Amity University yesterday.

Kumar said if one has to draw two curves for health insurance segment, one indicating growth and second learning curve, it can be observed that the growth curve is ahead of learning curve.

This, he added, implies that industry's main aim is only to sell and market health policies, but there are important takeaways in such shortcomings so that the level of mistrust between insured and insurer can be minimised.

Richard Kipp, Managing Director, consulting firm Milliman said, health insurance in India has increased tremendously over few years but India needs to be cautious in its growth vis-à-vis the US where growth has now become stagnant.

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Bank, insurance services paralysed

Public-sector banks and many government offices were shut on Thursday on the second day of a general strike called by 11 trade unions pressing their demands and to protest against the ‘government’s pro-market reforms’. The bank employees, under the banner of United Forum of Bank Unions
Indore, took out a rally and held demonstration in front of the divisional commissioner office. Later, they handed over a memorandum addressed to the Prime Minister to the deputy commissioner.

“On the second day also, no operations were conducted in 5,797 bank branches in Madhya Pradesh, including 385 branches in Indore of 26 public sector banks, 11 private sector banks and eight foreign banks and rural banks,” a release issued by the bank union stated. Certain private sector banks including ICICI Bank, HDFC Bank, Axis Bank and IndusInd Bank were functional and foreign banks such as HSBC and Citibank also remained open.

Banking operations were ‘badly hit’ in Indore due to the two- day nationwide called by Central trade unions. In Indore the clearing house operation is managed by the State Bank of India, where the strike was total along with the other nationalised banks, said Alok Khare, general secretary, MP Bank Officers’ Association.

Most of the shopkeepers in Sarafa, the gold market of Indore, who daily deposit cash in banks were saddled with cash that they were forced to keep in their safes.

Apart from banks, work came to a standstill in 42 post offices and 35 branches of Life Insurance and general insurance companies as the employees did not turn up for work.

While ATMs remained functional, people who wanted to withdraw large amount of cash were hit. Similarly, people who had to transfer funds also faced inconvenience as no transaction took place and the check clearing operations remained suspended for the second day in a row. However, internet banking reduced the impact of the strike to some extent.

Strike hits work in banking, insurance sector

BHOPAL: Banking and financial sector operations in the state were badly hit on Wednesday, first day of the two-day all India strike by trade unions of organized and unorganized sector to protest against economic policies of the United Progressive Alliance (UPA) government. While banking business worth several thousand crore rupees came to a standstill, working in public sector undertakings like BHEL, BSNL and insurance companies were badly affected.

The call for the strike has been given by 11 central trade unions including Indian National Trade Union Congress (INTUC), All India Trade Union Congress (AITUC), Bharatiya Mazdoor Sangh (BMS), Centre of Indian Trade Unions (CITU) and All India United Trade Union Centre.

Workers from the transport, mandi and mining sector were also on strike in parts of the state while others will join the general strike on Thursday.

In the state capital essential services like hospitals, public transport, petrol pumps, schools and colleges remained unaffected.

Joint front of trade unions (JFTU) described the strike as successful. "Employees in banking, insurance and others areas of organised sector struck work on day one. The strike was successful in unorganised sector also," said JFTU spokesman Pushan Bhattacharya.

Porters, transporters and traders will join the strike on Thursday.

United Forum of Bank Union coordinator VK Sharma said banking business worth Rs 67,000 crore was affected in Bhopal district on Thursday.

"There are 400 branches of nationalized banks in Bhopal district where 5,000 employees work. All participated in the strike," Sharma claimed. In MP, Rs 3.14 lakh crore banking business was affected. "In 5,800 branches of banks from Madhya Pradesh, about 40,000 employees took part in the strike," he claimed.

In Bhopal district, there are 400 ATMs of different nationalized banks. "The claims that banks had taken adequate measures and loaded additional cash in the ATMs to meet cash needs of customers turned out to be untrue as several ATMs went out of cash by afternoon and people were seen rushing from one counter to the other. Several complaints about cash withdrawal were received," he added. Customers would face more problems in withdrawing cash from ATMs on Thursday, he said.

Insurance, transport, banking sectors likely to be hit on trade unions strike

The country braced for a two-day nationwide strike called by 11 trade unions from tomorrow in support of their demands with banking, insurance and transport sector likely to be affected in some states.

As fresh appeals were made today to the trade unions to call of the strike, leading industry body Assocham warned that the economy would take a hit of between Rs 15,000 crore and Rs 20,000 crore due to disruption in economic activity.

The government renewed its appeal to the bank employees including from the RBI not to join the strike saying there is "really no reason" for them to go ahead with it.

Normal life is likely to be crippled in states like Kerala and Tripura where workers from various sectors including transport and banking are set to join the protest against the Centre's economic and labour policies.

States like West Bengal, Kerala, Maharashtra, Gujarat, Tamil Nadu, Delhi, Haryana, Karnataka and parts of Uttar Pradesh are likely to be affected significantly, Assocham president Rajkumar Dhoot said in a statement in Kolkata. Apart from unions owing allegiance to the Left, the pro-Congress INTUC and pro-BJP BMS are also participating in the strike.

The unions have put forward a charter of 10 demands such as urgent steps to control price rise, strict enforcement of labour laws in all places of work, social security net for workers in the unorganised sector, end to disinvestment in PSUs and raising minimum wage to Rs 10,000 a month. 

Federal health insurance exchanges face uphill battles

The marketplaces may run into adverse selection problems and struggle to comply with state laws, says a report — concerns echoed by some physician organizations.

Washington Federally operated health insurance exchanges may find it more challenging than other exchange models to attract healthy patients and maintain stable insurance markets, said the author of a new policy brief by Health Affairs and the Robert Wood Johnson Foundation.

The Affordable Care Act created the exchanges to provide individuals and small businesses with a means to shop for coverage options. Although some states have opted to develop their own marketplaces, about half are leaving it up to the federal government to run exchanges in their states. A handful have chosen a state-federal partnership approach, in which states would retain traditional insurance regulatory authority.

In so-called federally facilitated exchanges, the federal government will operate the marketplaces, not just facilitate them, wrote the brief’s author, Sarah Goodell, an independent health policy consultant. Depending on the arrangement they strike with the Dept. of Health and Human Services, states could end up performing some duties, such as administering the states’ reinsurance programs and making final eligibility determinations for Medicaid and the Children’s Health Insurance Program.

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More city nursing homes to provide cashless insurance

More nursing homes in Mumbai will soon provide cashless insurance treatments, as the Association of Medical Consultants (AMC) is set to create a cell to ease the paperwork required in such cases.

A cashless medical insurance implies that in case the insured person is hospitalised

in any of the network hospitals, the claim is settled by the health insurance company directly with the hospital.

The AMC has formed a body, the Network of AMC Hospitals (NoAH), to help private and public sector insurance companies come together so that patients can avail of cashless insurance treatment.

The NoAH has also partnered with an outsourced knowledge partner who will handle the authorisation process. 

Since 2010, nursing homes have not been offering cashless insurance treatment for its patients.

“The cell will deal exclusively with the problems associated with nursing homes. It will be a self-regulated group which will promote uniform billing standards and voluntary accreditation.

"170 of the 217 members attached with NoAH already have accreditation. We are in talks with the other insurance companies,” said Dr Sudhir Naik, chairperson, NoAH.

The lack of cashless insurance was driving nursing home patients to hospitals, said doctors.

“Many people are going straight to private hospitals because they have the option of cashless insurance. However, what they do not realise is that in the bargain, the claims are higher,” said Dr Sangeeta Pikale, convener, NoAH.

The nursing homes that have not been accreditated yet have promised to do so in a year.

The nursing homes under NoAH will have a common billing format, common insurance and cashless procedural format, and will display the tariff of services provided in the nursing homes.

“They will not have the problem of following up on paper work. This will benefit the nursing home, insurance company and the patient,” said Dr Naik.

Insurance sector looking for remunerative tax incentives

The Indian insurance sector is looking for remunerative tax incentives in Budget 2013-14 to boost sales volumes and increase penetration. While life insurers demand separate deduction limits for long-term insurance products, non-life insurers want special exemption categories for home and property insurance.

Amitabh Chaudhry, managing director and chief executive officer (CEO) of HDFC Life Insurance, said while the government was aiming to shift savings from real asset classes such as gold to financial asset classes, the Budget would provide an opportunity to introduce some long-standing demands of the life insurance industry.

According to T R Ramachandran, CEO and managing director of Aviva Life Insurance, separate sub-limit for long-term savings such as insurance is crucial to spur demand for life insurance products. “Currently, the deduction under Section 80C is a combined limit shared with other investment products, including provident fund contributions, savings certificates, bank tax saver deposits, and insurance and life insurance premiums. Hence, the government should look at encouraging people to save for long-term by providing a separate sub-limit of Rs 1 lakh for long-term savings,” he said.

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Motor insurance for dummies

A vehicle is a valuable possession for its owner. Motor insurance is mandatory by law so every car or bike owner must have a motor insurance. But not all are aware about its features, what is actually covered and what is not.

 A vehicle is a valuable possession for its owner. Motor insurance is mandatory by law so every car or bike owner must have a motor insurance. But not all are aware about its features, what is actually covered and what is not.

Your vehicle can be covered under either Third Party Insurance or Comprehensive Car Insurance.

Third Party Insurance only covers your liability towards a third party in case of death, injury or property damage caused to them by your vehicle. It doesnt do any good to your vehicle. If you love your car or bike you must have a Comprehensive Insurance policy which covers both third party liability and damage to your vehicle. But this is not much of a worry since most private players offer only Comprehensive Insurance policy. The insurance policy is valid for one year. It becomes effective from the moment the payment of premium is received by the insurance company and ends at midnight exactly a year later.

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Claimed insurance? Health, motor covers will sting you

Get ready to pay more for your health or motor insurance covers if you have made a claim in the past.

The Insurance Regulatory and Development Authority (Irda) has proposed a new set of rules, effective from March 2014, giving general insurers the leeway to charge differential prices for motor and health plans, based on individual claims experiences. So, if you have made a claim, you end up paying more.

“Pricing is a function of product feature and the risk perceived by insurers after taking into various factors. Differential pricing will benefit customers as there will be a wide difference between policyholders who made claims and who didn’t,” said Sampath Kumar, chief financial officer, Bharti Axa General Insurance.

On the other hand, at least theoretically, you could be paying less if there is no claim against your name.

The Irda has also proposed that insurers to set aside more capital for policies where the risk is higher — mainly those offering guaranteed returns.

In an exposure draft put out on Thursday, it said it has decided to move from the current factor-based pricing regime to one based on solvency. Accordingly, life insurance policies offering guaranteed returns will require higher solvency margins, or more capital, to be set aside. This will push up premiums for traditional products, said a senior actuary.

However, unit-linked policies will be less expensive as insurers need to set aside less capital against them.

Good Health Insurance - How Do You Find One

Health Insurance in Simple Words:

Health insurance is a type of insurance that provides financial coverage for medical costs incurred from illnesses and injuries. The rise in illnesses and injuries in today fast-moving world have made health insurance a must-have for everyone. Health insurance also gives you peace of mind when in times of stress incurred from the hospitalization of a loved one.

Buying Health Insurance Today:

The insurance industry has witnessed a boom in the past decade with many young and dynamic companies offering smart, economic policies. This has made the customer choice a vital and careful one. Choosing the right kind of insurance means a lot as policies differ in terms of coverage and flexibility. In most cases, your health insurance will become inadequate in terms of financial coverage. Hence, it is a must to choose a good health insurance for your family.

Defining Good Health Insurance: 

A good health insurance policy is one that protects you from medical expenses you can’t afford on your own. It also covers a wide range of medical expenses including doctor fees, outpatient treatment, hospitalization expenses, prescription medicines, emergency ambulance services, and diagnostics. A good health insurance not only provides you with better access to health care, but also reduces your out-of-pocket expenses.

Choosing Good Health Insurance:

There has been a rise in health risks and health care costs, making it extremely important to choose a good health insurance that not only covers your basic health care needs, but also miscellaneous expenses such as eye care, dental treatments and maternity. However, the amount of health insurance policies available is vast making the task of choosing a good health insurance policy a tiring one.

Here are some things to look for while choosing a good health insurance policy:

-          Which insurance plan best suits the needs of you and your family?

-          What are the coverage options available?

-          Does the policy cover disabilities and other critical illnesses?

-          Does the policy provide extra health covers that could benefit you?

-          Are there any pre-existing clauses that you should know?

-          Most importantly, is the policy affordable?

What Should Your Policy Cover?

Apart from standard hospitalization expenses and medical bills, health insurance policies nowadays offer coverage for a lot of miscellaneous expenses too. Policies cover dental treatments and eye care as part of their plan while maternity expenses are covered with a waiting period that differs from one policy to another. Some policies also cover ayurvedic treatments. A good health insurance plan must also cover out-of-pocket expenses incurred before, during and after hospitalization.

A good health insurance policy is one that covers you for what you require and what you don’t. Remember, a good policy can help you stay covered from unexpected eventualities. Secure yours and your family health with an ideal health insurance policy that fits your needs and budget.

Repeat offender? car insurance may cost more

Are you a repeat offender of traffic rules? Soon, driving may turn out to be costlier for you. Or, you may be forced to even stop driving. The Delhi traffic police are planning to send details of the cars of habitual offenders to insurance companies so that they can be forced to pay more
on premiums.

The companies can even refuse to renew their insurance plans and the police regularly impound uninsured cars.

The police said the initiative would come into effect once the e-challan system — which would store digitally the details of vehicles of high-risk drivers — becomes operational by March.

“The data would either be uploaded on our website or be sent to the insurance companies,” said Anil Shukla, additional commissioner (traffic). He said the insurance companies would then have to decide on policy renewal and premium hike.

Claiming that “it will deter the rash driver on city roads”, Sudhir Yadav, special commissioner of police (traffic), said drivers would be more careful now that getting traffic citations repeatedly would mean an increase in premiums.

Third party motor insurance premium may rise further

Mumbai: Lakhs of vehicle owners across the country may have to pay more for buying the mandatory insurance cover — third party motor cover — for their vehicles.

The third party motor insurance premium is likely to go up within the range of 15-50 per cent in 2013, the second hike in the last one year.

“The hike may come within a fortnight . The premium may increase between 15-50 per cent in various vehicle categories,” said the chairman of a public sector insurance company.

As the third party motor insurance is still regulated by IRDA, it has already decided to hike the rates to make up the huge losses in this portfolio — a lion’s share of total losses of over Rs 10,000 crore suffered by the insurance sector is accounted by third party motor cover.

“Our claim ratio is 175 per cent in the third party motor segment,” said G Srinivasan, CMD, New India Assurance.

In fact, the earlier hike which was done in March 2012 was disputed by the transporters’ association which had fought a legal battle with IRDA and general insurers in Calcutta High Court. However after eight months of litigation, the court had passed verdict in favour of the hike.

Earlier in 2012, while asking the domestic general insurers to hike the provisioning — capital to be set aside to pay the future claims as it takes years settle claims under this category — against the third party motor portfolio, the IRDA had assured