New India Assurance to unveil four new mediclaim policies

New India Assurance - India's largest general insurance company on Monday announced that it would launch four new health insurance products in another six months. Sri G. Srinivasan, Chairman-cum-Managing Director of New India Assurance Company said, “The products awaiting regulatory nod are - Family Floater, Top-up, Critical Illness cover and policy for high net worth individuals.”

New India Assurance is aiming for 20% growth and has set a target of Rs 15,000 crore (Rs 12,000 crore from domestic and Rs.3, 000 crore from overseas operations) in premium income during the current financial year as against Rs 12,500 crore of previous fiscal, Srinivasan said.

Health insurance segment contributes 27% of the total business of the company, he added. Srinivasan said that the company has registered a Profit After Tax (PAT) of Rs. 262 crore during the first quarter of the current fiscal. Further, he said that company’s PAT this fiscal year would touch Rs. 1,000 crore, since the company expected to renew 80 - 85 % of the existing products, and the remaining 15 % from new premium.

New India Assurance is present in 22 countries, and aiming to expand its business in new territories like- Myanmar, Canada and Qatar this fiscal year. The company would also expand its agent base to one lac in the next two years, from the current agent strength of 55,000. During the fiscal, the company is also planning to open another 400 micro offices across the country, taking the total number to 1,000. 

Source: http://www.insuringindia.com

Manulife to buy out 26% stake in ING Life

Canada-based Manulife Financial Services is in final round of discussion with battery behemoth Exide Industries to buy 26 percent stake in ING Life Insurance Company, sources close to the development said. Since the Dutch partner ING Financial group exited the insurance joint venture ING Life Insurance, Exide has been in search for a foreign partner. However, CEO of Manulife Financial Services, Sri Mukul Gupta has refused to comment when asked.

If the deal is finalized, it will be the first major investment by an insurance company in India since April, when Sumitomo tied up with Delhi-based Max India. Manulife Financial Services can buy 26 percent stake, the maximum permissible under the current law. Although, the deal value couldn’t be ascertained but ING Life Insurance was valued at about Rs 1,100 crore when ING exited. Exide had purchased 50% stake from three investors including ING, retired investment banker Hemendra Kothari and the Enam group taking the entire control over the company.

The Insurance (Amendment) Bill which permits to raise Foreign Direct Investment (FDI) to 49 percent, is yet to be tabled in the parliament though the government gave some indications that it may be passed by the end of the monsoon session.

Seeing a slowdown in Indian insurance sector due to the general economic slowdown and the after effects of a sudden restriction on unfair practices by the Insurance Regulatory and Development Authority (IRDA), New York Life and ING have exited Indian operations while British banking giant HSBC is in talks to follow suit. Foreign investors are waiting for the raise in the FDI ceiling in insurance before putting more money.

Source: http://www.insuringindia.com

Hiding health facts may result into repudiation of claims

The Goa State Consumer Disputes Redressal Commission has reversed the order of the North Goa District Consumer Disputes Redressal Forum which ordered the SBI Life Insurance Company to honour the Insurance claim of a deceased person who hailed from Marcel in Ponda taluka.

The SBI Life had repudiated the claim on the basis that the deceased had withheld the facts that he was suffering from diabetes and was chronic alcoholic. The Goa State Consumer Disputed Redressal Commission has brushed aside the complaint against the bank.

The deceased had taken a house loan of Rs 10 lac from the St. Estevam branch of the State Bank of India in January 31, 2008. The deceased had also taken a group insurance policy from the bank meant for housing loan borrowers of SBI. Though the deceased had submitted a good-health declaration to avail of the policy, the policy stipulated that the assurance would be null and void, if any incorrect averments were made or if any information was suppressed.

 In October 2008, the deceased was admitted to a hospital where he diagnosed with cirrhosis of liver and his past history was recorded as a 'known case of diabetes mellitus on regular treatment'. He was then admitted to other hospital for further treatment. Here it was noted that the deceased had a history of diabetes, was a smoker and chronic alcoholic for 20 years. He expired on November 7, 2008. The hospital's death summary listed a long list of medical conditions including 'alcoholic liver disease'.

The nominee, wife of the deceased filed an insurance claim but the insurer rejected the claim stating that the deceased had given a false good health declaration at the time of entering into the insurance scheme. The wife approached the district forum which ruled in her favour. The bank then appealed before the Goa State Consumer Disputes Redressal Commission. The commission observed that the deceased has suppressed the facts and gave false answers to obtain the policy. The commission termed it a fraud case because the insured despite being a regular smoker, a drinker for 20 years, a diabetic for three years on medication who eventually died of cirrhosis of the liver, had withheld the facts at the time of signing the policy. 

Source: http://www.insuringindia.com

Insurance agents to be banned from selling ponzi plans

Insurance watchdog, the Insurance Regulatory and Development Authority (IRDA) has decided to come out with stricter guidelines for insurance agents in order to prevent them from marketing ponzi schemes. This decision has been taken as a result of the Saradha scam, a financial scandal which ate into Rs. 200–300 billion of over 1.7 million depositors. This was caused by the collapse of a Ponzi scheme run by Saradha Group.

Under the new guidelines, both individual as well as corporate agents would have to submit written undertakings of having no association with private entities involved in the business of accepting public deposits. This stricture would be applicable to both public and private insurance companies as well as general and life insurance firms.

The authority will shortly ask insurance companies under its authority to collect the written undertakings from their regular and corporate agents, IRDA sources said.

The Saradha scam clearly revealed that several insurance agents most of who were associated with Life Insurance Corporation (LIC) of India, were doubling up as collection agents of different chit fund companies.

Source:  http://www.insuringindia.com/

Canara Bank ties-up with United India Insurance

With a view to cross promotion of each other's products, Public sector bank, Canara Bank and state-owned general insurer, United India Insurance (UII) on Monday signed a Memorandum of Understanding (MoU). Now, the insurer will leverage Canara Bank's huge network of over 3,800 branches to sell micro insurance products to rural population.

The MoU was signed by Canara Bank CMD Sri R K Dubey and United India Insurance CMD Sri Milind Karat CMD, at a function in Bangalore. Under the MoU, Canara Bank has announced a retail loan package created exclusively for the employees of UII. In return, UII also launched specific personal insurance products designed for the bank's customers to cover their financed and non-financed assets.

Sri R K Dubey said that the bank aims to earn Rs 50 crore as fee from selling non-life policies in the current fiscal, up from Rs 15 crore in the previous fiscal. He also said that the bank is looking to increase its branches from the current 3,800 to 5,000 by FY’ 2015. The bank is also on the threshold of tieing-up with another state-owned general insurer for health insurance. 

Source: http://www.insuringindia.com

Motor tribunal orders insurer to pay compensation

In an accident in 2009, Muralidhar Pandilapalli, a 38 year old software professional from Pune, was hit by a speeding truck resulting in his death. 

At the time of the incident, Muralidhar was drawing a package of INR 5 lakhs per annum. He left behind a 34 year old wife, a 6 year old son and a 1 year old daughter. They filed a claim with the insurance company, New India Assurance Ltd. The insurer denied the claim on the basis that the truck was not driving rashly. On the contrary, the company concluded it was Muralidhar who was driving rashly and tried to overtake the truck from the left side resulting in his death.

Upon being denied by the insurer, the dependents filed the claim with Motor Accident Claims Tribunal (MACT), Pune. After looking at all the proofs submitted before the tribunal, the MACT observed that the accident occurred due to rash and negligent driving by the truck driver. MACT completely denied the insurer’s version of the accident and ordered the insurer and truck owner to jointly pay INR 65.27 lakh alongwith 7.5% interest from December 2009 when the petition was filed.

Source: http://www.insuringindia.com

New India Assurance brings a premium relief for diabetes, BP patients

Country’s largest general insurance company, New India Assurance has announced that it would not charge extra premium for patients with diabetes or hypertension under its revised health insurance policy. The insurer has also withdrawn a clause from its policy that excluded cover for ailments caused by consumption of tobacco. This move will not only come as a relief to a huge urban population, but it will also eliminate disputes arising out of wrongful rejection of claims.

As of now, the insurer has been charging 10-20% extra premium to health insurance seekers suffering from these two conditions. Almost every insurer has been charging as high as 30-40 percent premium for offering health insurance cover to individuals with such existing ailments at the time of issuing policies. Also, some insurance companies continue to refuse offer covers to individuals with these conditions. 

Mr. Antony Jacob, CEO of Apollo Munich, a leading health insurer said, “In case an individual suffering  from chronic conditions such as diabetes or hypertension, it is evident that the health risk applicable on this particular individual will be greater than a similar individual without such problems. This leads to the insurance company applying an extra premium on health insurance policies of an individual suffering from such conditions.”

Now, the new mediclaim policy allows health insurance cover up to Rs 8 lac as against earlier Rs 5 lac. “Senior citizens will also be given a one-time option to increase their sum insured if they have had two claim free years”, said Sri Segar Sampath Kumar, Head ( health insurance), New India Assurance.

The new policy has come into effect from July for new sales and all renewals from August 2013 will be under the new terms. 

Source: http://insuringindia.com/

IRDA asks insurers for guidelines to TPAs for health insurance claims

Insurance watchdog, Insurance Regulatory and Development Authority (IRDA) has asked all general insurance companies and stand alone health insurers to provide detailed guidelines to third party administrators (TPAs) for health insurance claim settlements.

Although, TPAs are not permitted for claim settlements or rejections in health insurance policies, they may handle claims, admissions and recommend to the insurer for the payment of claim settlement on the condition detailed guideline is prescribed by the insurer to them for claim settlement.
IRDA circular said, “Every insurer utilising TPAs is advised to send a specific confirmation to this effect to the Authority on or before September 30, 2013.”

The regulator has suggested all the insurance companies to check that detailed guidelines are prepared and given to the respective TPA as per its regulation.

A TPA is an organization that processes insurance claims and also handles many aspects of other employee benefit plans such as processing of retirement plans and flexible spending accounts. This can be viewed as outsourcing the administration of the claims processing.

Source:  http://www.insuringindia.com

Consumer forum directed insurer to pay 30 lac to a trader

The UP State Consumer Disputes Redressal Commission has governed an insurer to pay Rs 30.9 lac as insurance claim to a trader whose food grain stock kept in a godown was destroyed in spontaneous combustion. The company had refused to pay the damages saying it was a case of ‘no-claim’ and its surveyor had assessed the total loss at Rs 16.9 lac.

The trader's premises was insured by the opposite party for a year from April 2006 - April 2007 for Rs 50 lac only on the stock of paddy, wheat, rice brawn D-oil cake, food grains and pulses against earthquake, risk and spontaneous combustion.

On September 11, 2006, a fire broke out on the trader’s premises due to combustion. It destroyed the stock of rice brawn D-oil cake kept in 20,200 gunny bags, weighing 14137.75 quintals. The stock was insured. The trader informed the fire officer of Sitapur for three consecutive days-September 11, 12 and 13. He also informed the insurance company and the police. The company had sent its surveyor to assess the loss. After 2-3 days, the trader saw more flames in the premises and called the firemen again but they didn’t come. 

The trader claimed a loss of over Rs 48 lac, but the insurer refused to accept it saying the trader had breached the insurance contract by misrepresenting the facts.

Consumer rights lawyer Sri Sarvesh Sharma said, “It is wrong to say that the complainant did not take out stock from the godown on the advice of the firefighters and allowed it to be destroyed.”

"The complainant is being accused repeatedly that he managed the total loss of stock in collusion with the fire brigades evidencing the total loss of stock, then how it could be said that it was partially damaged”, the commission said.

The commission also found the surveyor's assessment of total loss being Rs 16.9 lac inexact and ordered the insurance firm to pay Rs 30 lac towards compensation.

Source: http://www.insuringindia.com

Inexpedient decisions of four PSU insurers caused Rs. 122 cr loss: CAG

Country’s official auditor the Comptroller and Auditor General (CAG) has blamed four public sector insurance companies - National Insurance, New India Assurance, Oriental Insurance and United India Insurance for causing loss of Rs. 122 crore. CAG in its report, tabled in Parliament, has pronounced their decision to enter into business pact with private player Star Health and Allied Insurance Company ‘an imprudent decision’.

In November 2007, the Tamil Nadu government invited bids from general insurance companies to provide health insurance cover to the state government employees and local bodies, among others. Star Health and Allied Insurance Company won the bid, in which the four PSU insurers too had participated. Although, the premium quoted by the four public sector insurance companies was much higher than finally agreed to by Star, they entered into a co-insurance agreement with the private insurer as the leader.

The report said that during the four-year period from June 2008 to June 2012, the four PSU insurers suffered a total loss of Rs 121.81 crore. During the period, the insurers received premium of Rs 137.33 crore and accepted expenditure of Rs 259.14 crore towards claims, administrative charges and other expenses.

Further, the report said, “A substantial part of claim was borne by the four PSU insurers, who accepted the co-insurance in spite of low premium and without putting in place appropriate checks and balances to safeguard their financial interests.”

Source : http://www.insuringindia.com

Odisha to introduce insurance scheme for school children

The Odisha government is chewing over an insurance scheme for students of government schools. If the scheme is implemented, over 66 lac students from Class I to X would be benefited.

The Naveen Patnaik government took this decision in view of frequent incidents of school accident recently, in which several students lost their lives. However, the proposal is in its preliminary stage, and insurer is yet to be finalized. 

The government representatives are in talks with general insurance companies. “We are discussing with various groups. Normsareyet to be finalized”, school and mass education secretary Smt.  Usha Padhee said.

“The scheme would cover all types of mishaps during school hour, educational tours, picnics, road accidents, fire, drowning, falling from trees or boundary wall collapse. The compensation money will help parents and guardians of affected students in meeting medical expenses immediately”, Smt. Padhi said adding, “In case of death, the parents of the deceased student would get compensation between Rs 25,000 to Rs 1 lac from the Chief Minister's Relief Fund, but there is no provision for major injuries.”

The government, as of now, has been providing compensation packages of around Rs 1 lac in case of major mishaps. And, in some cases, the medical expenses are also borne by the government.

Source : http://www.insuringindia.com

LIC to pay compensation to widow for wrongly rejecting husband's insurance claim

The Maharashtra State Consumer Disputes Redressal Commission has governed the Life Insurance Corporation of India (LIC) to pay a compensation of Rs 1 lac with 9% interest from March’ 2000 to a widow for wrongly rejecting her husband’s insurance claim. This verdict came after the country’s largest insurance company had filed an appeal in the state commission in 2003 against the decision of a district forum, who ruled in favour of the widow.

On July 2, 1997, Pradeep, a resident of Vile Parle in Maharashtra suffered a heart attack and died. His widow, Asha Dave submitted the claim form to the insurer, but the insurer rejected her claim on the grounds that her husband Pradeep had suppressed that he was suffering from hypertension. Then, the widow, Asha Dave moved to district consumer forum in year 2001. The forum ruled in favour of Asha. After that, the state-run insurer filed an appeal in the Maharashtra State Consumer Disputes Redressal Commission.

In its appeal, the LIC claimed that the insured’s certificate of treatment/consultation signed by his doctor revealed that he suffered from hypertension.
The commission said, “We find no reason to believe that the deceased had suppressed any material fact of suffering from hypertension.”

“It cannot be said that the LIC had a valid reason to repudiate the claim. Repudiation being arbitrary, deficiency in service on the part of LIC is well established, the commission added.
Asha rejected LIC’s claim that her husband was suffering from hypertension. She said when the LIC recorded details for Pradeep’s health statement in 1997; he was not suffering from hypertension. A mediclaim attendant's certificate issued after Pradeep's death to Asha by the same doctor who had signed his certificate of treatment/consultation stated that he did not suffer from hypertension. "This declaration assumes more weightage," the commission said. "The certificate of treatment/consultation cannot be believed."

Source : http://www.insuringindia.com/

Aviva may exit Indian insurance biz

British insurer Aviva PLC may pull out its India life insurance joint venture with the Dabur Group. In the 74:26 joint venture, the foreign insurer holds the maximum permissible limit of 26% stake, 

which valued around Rs 3,040 crore. According to the sources,Aviva Life is in the process of moving away from less-profitable markets where it has struggled to expand its business. Aviva aims to cut its costs by Rs 3,700 crore by the end of the year. The insurer is in the process of hiring corporate advisors to find buyers for its stake in the joint venture.   Sources said that Aviva is considering over numerous options, including selling its stake to Dabur Group itself, if it fails to find a foreign buyer. If Aviva exits from Indian insurance market, it would be the 3^rd foreign insurer to quit India since 2012, obstructed by regulations that restrict foreign ownership and fierce political opposition to changing those limits. Dabur Group owns Ayurvedic medicine and food products manufacturer Dabur India.

 “We don't comment on market speculations or rumours as a policy,” said Aviva PLC in a statement. Sri Mohit Burman, a director of Aviva Life who represents Dabur Group, was not available for comment.

Aviva had identified India and China as potential and ‘must win’ markets, but the decision to sell out its Indian insurance business indicates a change in that policy. Aviva hired former AIA Group chief executive Mark Wilson last year to lead a turnaround in its business, hit by slower growth in its main market of Europe. Wilson joined after spiralling costs and poor share price performance triggered an investor revolt in 2012 that forced out then-CEO Andrew Moss.

This year, Aviva pulled out of its Malaysian insurance joint venture and exited from Russia.
The insurer witnessed a 4.1% drop in new business premiums for the period April-May, as compared to the same period last year. It saw a 7.8% drop in new premium collection to Rs 2,960 crore in this period.

Source: http://www.insuringindia.com/

New India Assurance offers discount on third party motor insurance bought online

Public sector general insurance company, New India Assurance Company Ltd. has decided to permit customers to buy third-party motor insurance policies through its website. According to a company insider, the company will offer a discount of 5-10% on premiums for such policies.

Sri G. Srinivasan, Chairman & Managing Director, New India Assurance said, “We plan to allow customers to purchase standalone third-party motor insurance policies and householder policies shortly through our online portal.”

Normally, general insurance companies do not show interest offering third-party motor insurance as it is a loss-making portfolio.

The third-party motor insurance has been mandated in India. Third party cover refers to the covers provided by the insurance companies for damage caused to a third party standing by the road and got injured or killed by an insured vehicle. In such cases, the claim amount can be unlimited. In recent times, this portfolio of insurance has seen high claims ratios in excess of 120%.

The New India Assurance Co. Ltd. head quartered in Mumbai is the largest general insurance company of India on the basis of gross premium collection inclusive of foreign operations. At present, online portal of the company offers private car and two-wheeler comprehensive insurance policies, health insurance cover, personal accident cover and foreign medi-claim policies.

Source : http://www.insuringindia.com