NASSCOM Created Health Insurance Plan for IT Sector

Dear Viewers,

In an initiative first of its kind by an industry body NASSCOM in association with ORIENTAL INSURANCE has created a Health Insurance planfor 2 - 5 million people in I.T.Industry.

 Over 200 companies have already committed to join the plan, and NASSCOM is expecting to bring 1000 SMBs under the scheme within 15 months from right now. When more people are part of any planthen insurance premium comes down. Given the scale of the IT Sector, NASSCOM's " TECHIE HEALTH PLAN" will bringdown the cost of providing insurance, especially for Small and Medium Businesses (SMBs). 

The scheme offers 30-50% cost saving for companies with up to 100 employees. Under the scheme employee along with his spouse and children will get cover of up to Rs.3 Lakh.  The scheme has different kinds of plans and the cost of the plan for a 100 - employee Company will vary from Rs.1.5 Lakh to 9.5 Lakh depending upon the plan.

Employees will not have to pay minimum premium unless they want to top the plan for more benefits.  Depending on the plan, 3-7 members of the family will be covered.  Plan is fairly comprehensive, covering even pre-existing ailments, maternity and new borns.

Insurance broking company Medimanage and Third Party Administrator 'MEDIASSIST' will also be involved in implementing the scheme.  NASSCOM will also organise road shows across the country to popularise this health insurance plan.

.... EDITOR

"New India Assurance" ordered to pay Rs 60000 by Consumer Court

DEAR VIEWERS,

Central District Consumer Disputes Redressal Forum has ordered The New India Assuance Co.Ltd., one of the biggest public sector general insurance companies, to pay around Rs.60,000/- as compensation to its policy holder SHIV KUMAR GUPTA.

Delhi-based Shiv Kumar Gupta holds a mediclaim policy from New India and he filed a claim for Rs.45,252/- towards medical expenses incurredfor his son. Mr. Gupta informed the Third Party Administrator (TPA) of New India Assurance and submitted the requisite documents to the TPA for claim processing.  But the New India Assurance has closed the claim processing on the grounds that in spite of several reminders, the policy holder did not provide the doctor's  prescription slip and IPD paper.   However, neither the insurers nor the TPA could prove that they had sent out reminders to the policyholder. Therefore, the consumer court ruled the decision infavour of the claimant Shiv Kumar Gupta and asked New India to pay for the expenses incurred plus Rs.10,000/- as compensation against harassment and mental agony and Rs.5,000/- as litigation cost.

The authorised person of the forum, Mr. B.B. Chaudary said that the New India Assurance company closed the claim without any valid reason and caused harassment and mental agony to the complainant.

.... EDITOR

Ministry of Finance asks Insurance regulator to relax branch opening norms

DEAR READERS,

On 30th April,2012, The Ministry of Finance has requested the Insurance Regulatory and Development Authority (IRDA) to relax the branch opening norms in smaller cities thereby increasing the penetration of insurance in smaller towns and rural areas.

The current penetration of insurance in rural areas is very dismal in both life as well as non-life insurance sector. The Ministry of Finance is of the opinion that the one of the ways to boost the penetration of the insurance in these areas is by relaxing the norms for opening branches. Taking the case of the Banking industry, the ministry believes that IRDA should also follow the footsteps of Reserve Bank of India (RBI) who relaxed the norms of opening bank branches in the Tier II cities.

Life as well as non-life insurance companies are confined to the limited urban population of India and therefore engaging in highly competitive tactics such as low pricing. If the insurance companies are allowed to expand geographically then they may hold on to their profitability grounds and come up with innovative products especially for such markets.

IRDA is a little apprehensive on currently allowing insurance companies to open branches in rural areas due to the fear that this step may affect the profitability and ratios of the insurance companies. According to the IRDA regulations, every insurance company should generate at least 7% of their total gross written premium from rural business.

.....editor

FINANCE MINISTER Urges IRDA to incentivize insurance e-policies

DEAR READERS,

On Wednesday, 4th April, 2012, the Finance Minister Mr. Pranab Mukherjee had a discussion with the board of Insurance and Regulatory Development Authority (IRDA) on various issues like cutthroat competition among the insurers, mis-selling of policies and promotion of online policies. 

In the private sector, life insurance companies have started selling policies through the internet. A customer can purchase a pure online term insurance policy by visiting the respective insurer’s website and pay the premium through debit/credit card or net banking. This online distribution space which had only two players till 2010, now has close to ten private life insurers promoting their online insurance policies. 

The Finance minister urged the insurance regulator to identify ways to expand the reach of online policies with a special emphasis on targeting the youth of our country. He reiterated the concern of poor insurance penetration in our country and the challenge in replicating the massive agent network of LIC across all the other companies in the life insurance sector. Mr. Mukherjee said, “Can we think of a system where in the mass market /OTC vanilla products with low-ticket size are incentivised by having a second level of agents with lesser entry restrictions?” He opened up the room for discussing ways to reach semi-urban and rural areas and spreading insurance literacy and awareness. 

The Finance Minister was extremely happy with the efforts of IRDA to dematerialise insurance accounts and set up a grievance redressal body for customer queries and assistance. After tasting success with one or two online policies, many life insurance companies are in the process of developing online policies across other sub-products in life insurance such Term with Return of Premium (TROP), Pension, ULIPs and Child Plans. The premium rates of online term plans are as low as one-third of the term plans which are available through the branch networks and agents. This low pricing has increased the popularity of online term plans and increased the sales numbers in this category for insurers. Lets hope with the request of the Finance Minister and the efforts of life insurance companies, more online policies are available at lower cost to the Indian consumers. 

....EDITOR