&

SUBMITTED BY:

MS. GUNJAN GUPTA (IIT DELHI)

MR. KISHAN RAJ (HANSRAJ COLLEGE, DU)

MS. BHAVNA THAKUR (UILS,PANJAB UNIVERSITY)

MR. AKSHAY MANOCHA (HANSRAJ COLLEGE,DU)

OBJECTIVESThe purpose of our research is to study Health Insurance industry in India and consumer related affairs with reference to unethical and sinful practices in general insurance which lead to an exploitation of Insuree (policy holder).

INTRODUCTION

FORMS OF HEALTH INSURANCE

Cashless Reimbursement

A Cashless facility is where the insurance company Reimbursement is when the patient pays the directly pays the hospital for the hospitalization expenses hospital bills by himself and then submits them to the

In this case, the patient need not pay the hospital from his insurance company for reimbursement. pocket.

TYPES OF HELATH INSURANCE COVERS

Hospitalization Cover Hospital Cash Cover Critical Illness Cover Personal Accident Cover Top-up Cover

.

What is Health Insurance? The term health insurance is a type of insurance that covers your medical expenses. A health insurance policy is a contract between an insurer and an individual /group in which the insurer agrees to provide specified health insurance cover at a particular “premium”.

IMPORTANCE FACTORS AFFECTING

Protects from the sudden, unexpected Age cost of hospitalization. Previous medical history Taking the benefit of latest medical facility Claim free years is much more affordable.

STAKEHOLDERS:1. IRDA :-

Stands for Insurance Regulatory and Development Authority, acts as regulatory authority of insurance companies and works in the interest of consumers.

2. Insurance companies :- Private Companies-- Reliance, HDFC, Bajaj ALLIANZ, etc. Public companies -- LIC, SBI, etc.

3. Consumers

4. TPA

EVOLUTION

The concept of Health Insurance was proposed in the year 1694 by Hugh the elder Chamberlen.

In 19th Century “Accident Assurance” began to be available which operated much like modern disability insurance.

During the middle to late 20th century traditional disability insurance evolved in to modern health insurance programmes.

Today, most comprehensive health insurance programmes cover the cost of routine, preventive and emergency health care procedures and also most prescription drugs.

SENARIO IN INDIA

The overall general insurance industry growth has kept pace with the GDP growth in the country and general insurance penetration has varied in a narrow band

After liberalisation of the Indian insurance industry in the year 1999- 2000, the Indian general insurance industry has witnessed rapid growth. The industry, in terms of gross direct premium, has grown from INR 11,446 crore in FY02 to INR 57,964 crore in FY12, which corresponds to a compounded annual growth rate (CAGR) of 17.6 percent. Insurance density, which is defined as the ratio of premium underwritten in a given year to the total population, has increased from USD 2.4 in 2001 to USD 10 in 2011. The growth in the general insurance industry has kept pace with the nominal GDP growth rate resulting in general insurance penetration remaining stable in the range of 0.55% to 0.75% over the last 10 years.

GROWTH IN INDIAN GENERAL INSURANCE INDUSTRY

FY

2002FY

2003FY

2004FY

2005FY

2006FY

2007FY

2008FY

2009FY

2010FY

2011FY

2012

0

10

20

30

40

50

60

GROSS DIRECT PREMIUM(INR Thousand Crore)

GROSS DIRECT PREMIUM(INR Thousand Crore)

FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

INSURANCE PENETRATION(%)

TYPES OF HEALTH INSURANCE

1. Family Floater policy :-A family floater health insurance, as the name suggests is a plan that is tailor made for families.  It is similar to individual health plans in principle; the only difference is that it is extended to cover your entire family.  This acts as an umbrella of coverage for the entire family and therefore the name.Advantages A family floater policy is easier to manage best health insurance for parents easy to add a new family member. maternity and new born baby cover makes it very attractive for young couples. Cashless feature and health id cards for all members makes it handy in case of medical emergencies. Income tax benefits under Section 80D.

2. Individual Health PolicyAn Individual Health Policy which caters to a separate health insurance policy for each of the family members. The policyholder can consume the entire amount alone.

3. Group Health InsuranceWhen a large group of people say over 20 who work, stay or are bonded by some nature of job are willing to get a Health insurance plan, they should opt for a Group Health Policy. Under a group health policy people who may have adverse health condition can also easily get health cover due to the greater negotiating power that a group contains versus a individual policy.

4. Travel Health InsuranceWhenever a person is travelling outside the geographical boundary of his / her health insurance plan it is always advisable that they take a Travel Health insurance plan. This is advised so that the person in-case falls sick or has any other medical emergency abroad need not worry about the high cost of healthcare in a foreign land. This is also mandatory to buy before travelling to a certain countries.

5. Critical Health InsuranceA critical health insurance policy hels cover certain set of diseases as prescribed under a policy only. As the name suggest critical health insurance, they cover all those major diseases which are either terminal or can reduce the human body to a vegetative state. Some of these would include, Alzheimer's disease, blindness, deafness, kidney failure, major organ transplant, multiple sclerosis, HIV/AIDS contracted by blood transfusion or during an operation, Parkinson's disease.

6. HospitalizationHospitalization plans only pay a pre-fixed amount as per the level of coverage for the room rent only. These plans are cheaper when compared to full indemnity plans as they do not pay for any treatments and medicines used during the course of hospitalization, as they only pay for room rent.

7. Senior Citizen Health InsuranceAs a person enters the golden age as many state of 60yrs, they start to lead a new life a life of a retired person. The needs and

wants of a person at this age are completely different from those that they would have had at age 40 yrs or 50 yrs. Thus they need health insurance plans which are suited best for them at this age, but sadly enough there aren‘t many. When a person above 60yrs of age goes to buy a health insurance plan he needs to check:

i. The network hospital closest to his residenceii. Co-Payment options which will ensure his hospital bills are never stoppediii. Lowest time frame for coverage of pre-existing diseaseiv. Lowest amount of waiting period

8. Maternity InsuranceStandalone maternity insurance are a rarity, thus many insurers include this as a part of their regular policies and also critical illness policies that they specifically design for women. Under maternity insurance, the female is covered for any complication that arises during her pregnancy and related to child birth.

INSURANCE COMPANIES1.

2.

3.

4.

5.

LIC JEEVAN AROGYA

GROUP HEALTH INSURANCE

RELIANCE HEALTH INSURANCE/CRITICAL

BAJAJ ALLIANZ HEALTH GUARD

MEDIPRIME/WELLSURANCE/CRITICARE

6.

7.

8.

9.

HEALTH SURAKSHA/CRITICAL

BHARTI HEALTH INSURANCE

SWASTHA KAVACH/MEDICLAIM POLICY

ICICI LOMBARD HEALTH INSURANCE

NUMBER OF NON LIFE INSURANCE OFFICES IN

INDIA (AS ON 31ST MARCH ‘13)

INSURER 2011-12 2012-13

PUBLIC SECTOR

PRIVATE SECTOR

5,354

1,696

6272

1827

TOTAL 7050 8099

RASTRIYA SWASTHYA BIMA YOJNA (1STAPRIL, 2008)

For people living below poverty line, an illness not only represents a permanent threat to their income earning capacity, in many cases it could result in the family falling into a debt trap. When the need to get the treatment arises for poor families they often ignore it because of lack of resources, fearing wage loss, or wait till the last moment when it’s too late. Even if they do decide to get the desired health care it consumes their savings, forces them to sell their assets and property or cut other important spending like children’s education. Alternatively they have to take on huge debts. Ignoring the treatment may lead to unnecessary suffering and death while selling property or taking debts may end a family’s hope of ever escaping poverty.

These tragic outcomes can be avoided through a health insurance which shares the risk of a major health shock across many households by pooling them together. A well designed and implemented health insurance may both increase access to healthcare and may even improve its quality over time.In the past Government have tried to provide a health insurance cover to selected beneficiaries either at the State level or National level. However, most of these schemes were not able to achieve their intended objectives. Often there were issues with either the design and/ or implementation of these schemes.

Keeping this background in mind, Government of India decided to design a health insurance scheme which not only avoids the pitfalls of the earlier schemes but goes a step beyond and provides a world class model. A critical review of the existing and earlier health insurance schemes was done with the objective of learning from their good practices as well as seeks lessons from the mistakes. After taking all this into account and also reviewing other successful models of health insurance in the world in similar settings, RASTRIYA SWASTHYA BIMA YOJNA was designed.

RSBY has been launched by Ministry of Labour and Employment, Government of India to provide health insurance coverage for Below Poverty Line (BPL) families. The objective of RSBY is to provide protection to BPL households from financial liabilities arising out of health shocks that involve hospitalization. Beneficiaries under RSBY are entitled to hospitalization coverage up to Rs. 30,000/- for most of the diseases that require hospitalization. Government has even fixed the package rates for the hospitals for a large number of interventions. Pre-existing conditions are covered from day one and there is no age limit. Coverage extends to five members of the family which includes the head of household, spouse and up to three dependents. Beneficiaries need to pay only Rs. 30/- as registration fee while Central and State Government pays the premium to the insurer selected by the State Government on the basis of a competitive bidding.

FEATURES:The RSBY scheme is not the first attempt to provide health insurance to low income workers by the Government in India. The RSBY scheme, however, differs from these schemes in several important ways.

Empowering the beneficiary – RSBY provides the participating BPL household with freedom of choice between public and private hospitals and makes him a potential client worth attracting on account of the significant revenues that hospitals stand to earn through the scheme.

Business Model for all Stakeholders – The scheme has been designed as a business model for a social sector scheme with incentives built for each stakeholder. This business model design is conducive both in terms of expansion of the scheme as well as for its long run sustainability.

• Insurers – The insurer is paid premium for each household enrolled for RSBY. Therefore, the insurer has the motivation to enroll as many households as possible from the BPL list. This will result in better coverage of targeted beneficiaries.

• Hospitals – A hospital has the incentive to provide treatment to large number of beneficiaries as it is paid per beneficiary treated. Even public hospitals have the incentive to treat beneficiaries under RSBY as the money from the insurer will flow directly to the concerned public hospital which they can use for their own purposes. Insurers, in contrast, will monitor participating hospitals in order to prevent unnecessary procedures or fraud resulting in excessive claims.

• Intermediaries – The inclusion of intermediaries such as NGOs and MFIs which have a greater stake in assisting BPL households. The intermediaries will be paid for the services they render in reaching out to the beneficiaries.

• Government – By paying only a maximum sum up to Rs. 750/- per family per year, the Government is able to provide access to quality health care to the below poverty line population. It will also lead to a healthy competition between public and private providers which in turn will improve the functioning of the public health care providers.

Information Technology (IT) Intensive – For the first time IT applications are being used for social sector scheme on such a large scale. Every beneficiary family is issued a biometric enabled smart card containing their fingerprints and photographs. All the hospitals empanelled under RSBY are IT enabled and connected to the server at the district level. This will ensure a smooth data flow regarding service utilization periodically.

Safe and foolproof – The use of biometric enabled smart card and a key management system makes this scheme safe and foolproof. The key management system of RSBY ensures that the card reaches the correct beneficiary and there remains accountability in terms of issuance of the smart card and its usage. The biometric enabled smart card ensures that only the real beneficiary can use the smart card.

Portability – The key feature of RSBY is that a beneficiary who has been enrolled in a particular district will be able to use his/ her smart card in any RSBY empanelled hospital across India. This makes the scheme truly unique and beneficial to the poor families that migrate from one place to the other. Cards can also be split for migrant workers to carry a share of the coverage with them separately.

Cash less and Paperless transactions – A beneficiary of RSBY gets cashless benefit in any of the empanelled hospitals. He/ she only needs to carry his/ her smart card and provide verification through his/ her finger print. For participating providers it is a paperless scheme as they do not need to send all the papers related to treatment to the insurer. They send online claims to the insurer and get paid electronically.

Success of RSBY

The scheme has won plaudits from the World Bank, the UN and the ILO as one of the world's best health insurance schemes. Germany has shown interest in adopting the smart card based model for revamping its own social security system, the oldest in the world, by replacing its current, expensive, system of voucher based benefits for 2.5 million children. The Indo-German Social Security Programme,

created as part of a co-operation pact between the two countries is guiding this collaboration

One of the big changes that this scheme is bringing investments to unsaved areas. Most of private investments in healthcare in India have been focused on tertiary or specialized care in urban areas. However, with RSBY coming in, the scenario is changing. New age companies like Global Healthcare Systems, a company based out of Kolkata and funded by Tier I Capital Funds like Sequoia Capital and Elevar Equity are setting up State of Art Hospitals in Semi Urban - rural settings. This trend can create the infrastructure that India's healthcare system desperately needs. 

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

Insurance Regulatory and Development Authority (IRDA) is an autonomous apex statutory body which regulates and develops the insurance industry in India. It was constituted by a Parliament of India act called Insurance Regulatory and Development Authority Act, 1999 and duly passed by the Government of India.As Health Insurance is in its very early phase, the role of IRDA will be very crucial. It has to ensure that this sector develops rapidly and benefit of insurance goes to the consumers. It has to guard against the ill effects of privatization. Unless privatization and development of health insurance is managed well it may have negative impact of health care, especially to a large segment of rural population in the country. If it is well managed then it can improve access to care and health status in the country rapidly. Experience from other countries suggest that the entry of private firms into the health insurance sectors, if not properly regulated , does have adverse consequences for the cost of care, equity, consumer satisfaction, fraud and ethical standards. Some of the areas of concern which the regulator has to look into are:

Many times the insurance claims are rejected due to small technical reasons. This leads to disputes

Various conditions included in the insurance policy contract is not negotiable and these are binding on consumer

There no analysis on what is fair practice and what is unfair practice

The most important area of dispute and unfair treatment is the knowledge and implications of pre-existing conditions.

The main danger in the health insurance business is that the private companies will cover the risk of middle class who can afford to pay high premiums. Unregulated reimbursement of medical costs by the insurance companies will push up the prices of private care. So large section of India’s population who are not insured will be at a relatively disadvantage as they will, in future, have to pay more for the private care. IRDA has stipulated regulations for both life and non-life insurance companies in many aspects of business but the same is lacking in respect of health insurance business. Given the health insurance is assuming greater significance, it is time for the regulator to etch a frame work for operating the health schemes. IRDA will have to evolve mechanism so that the private insurance companies do not skim the market by focusing on rich and upper class clients and in the process neglect a major section of India’s population.

In a view to ensure that the rural and less-developed areas do not fall prey to a step-motherly treatment in penetration of health business, the Regulator may ensure, in line with its rules jotted down for private life and non-life insurers, that minimum annual targets are given to the benefit providers so that at any given point in time, a decent portfolio of health coverage’s represent the rural sector

ROLE OF IRDA

IRDA should ensure and encourage different organizations and private insurers to develop products for the poorer segment of the community and if possible build an element of cross subsidy for them.

The IRDA will have a significant role in regulating the health insurance sector and safe guarding the interests of the policy holders by minimizing the unintended consequences.

MISSION STATEMENT OF THE AUHTORITY

  To protect the interest of and secure fair treatment to policyholders; 

 To bring about speedy and orderly growth of the insurance industry (including annuity and superannuation payments), for the benefit of the common man, and to provide long term funds for accelerating growth of the economy;

 To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates;

 To ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressal machinery;

 To promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a reliable management information system to enforce high standards of financial soundness amongst market players;

  To take action where such standards are inadequate or ineffectively enforced; 

  To bring about optimum amount of self-regulation in day-to-day working of the industry consistent with the requirements of prudential regulation.

FEES FOR SERVICES

PREMIUM REIMBURSEMENT

INSURER

Government or private

(for profit or non profit)

INSURED

Individual &/or employer

Making regular

HEALTH CARE PROVIDER

Government and/or Private

(For profit or non profit)

T

P

A

HEALTH SERVICES

Health insurance fraud is described as an intentional act of deceiving, concealing, or misrepresenting information that results in health care benefits being paid to an individual or group.

Fraud can be committed by both a member and a provider. Member fraud consists of ineligible members and/or dependents, alterations on enrolment forms, concealing pre-existing conditions, failure to report other coverage, prescription drug fraud, and failure to disclose claims that were a result of a work related injury. Provider fraud consists of claims submitted by bogus physicians, billing for services not rendered, billing for higher level of services, diagnosis or treatments that are outside the scope of practice, alterations on claims submissions, and providing services while under suspension or when license have been revoked. Independent medical examinations are used to debunk false insurance claims and allow the insurance company or claimant to seek a non-partial medical view for injury related cases.

According to The Coalition Against Insurance Fraud, health fraud depletes taxpayer-funded programs like Medicare, and may victimize patients in the hands of certain doctors. Some scams involve double-billing by doctors who charge insurers for treatments that never occurred, and surgeons who perform unnecessary surgery.

One of the main reasons that medical fraud is such a prevalent practice is that nearly all of the parties involved find it favourable in some way. Many physicians see it as necessary to provide quality care for their patients. Many patients, although disapproving of the idea of fraud, are sometimes more willing to accept it when it affects their own medical care. Program administrators are often lenient on the issue of insurance fraud, as they want to maximize the services of their providers.

The most common perpetrators of healthcare insurance fraud are health care providers. One reason for this is that the historically prevailing attitude in the medical profession is one of “fidelity to patients”. This incentive can lead to fraudulent practices such as billing insurers for treatments that are not covered by the patient’s insurance policy. To do this, physicians often bill for a different service, which is covered by the policy, than that which was rendered.

INSURED

Individual &/or employer

Making regular

HEALTH CARE PROVIDER

Government and/or Private

(For profit or non profit)

COMPLAINTS AND FRAUDS

Mis-selling ,is one the type of fraud which means selling a product by giving a wrong picture of a product, it may include, giving wrong information, giving unrealistic information, not giving full information about the product. You must have heard an insured, saying – but this was not I asked for. And, your agent accusing, but then I did mentioned all the details upfront, didn’t I? Insurance is a business of selling commitments and here is a case where this was broken. Unfortunately the product was mis-sold. Mis-selling is not unique to insurance and happens in various lines of businesses (loans, credit cards, investment products, pharmacy, hospitality etc.), but Insurance being an intangible service – the principle of Caveat emptor prevails in insurance.

Another motivation for insurance fraud in the healthcare industry, just as in all other types of insurance fraud, is a desire for financial gain. Public healthcare programs such as Medicare and Medicaid are especially conducive to

fraudulent activities, as they are often run on a fee-for service structure. Physicians use several fraudulent techniques to achieve this end. These can include “up-coding” or “upgrading,” which involve billing for more expensive treatments than those actually provided; providing and subsequently billing for treatments that are not medically necessary; scheduling extra visits for patients; referring patients to another physician when no further treatment is actually necessary; "phantom billing," or billing for services not rendered; and “ganging,” or billing for services to family members or other individuals who are accompanying the patient but who did not personally receive any services.

Perhaps the greatest total dollar amount of fraud is committed by the health insurance companies themselves. There are numerous studies and articles detailing examples of insurance companies intentionally not paying claims and deleting them from their systems, denying and cancelling coverage, and the blatant underpayment to hospitals and physicians beneath what are normal fees for care they provide. Although difficult to obtain the information, this fraud by insurance companies can be estimated by comparing revenues from premium payments and expenditures on health claims.

FRAUD COMMITTED BY INSURER/ COMPLAINTS BY INSUREE (POLICY HOLDER)

CLAIM

S

COVER

NO

TE R

ELATE

D

COVER

AGE

OTH

ERS

POLICY

RELATE

D

PREMIU

M

PRODUCT

PROPO

SAL REL

ATE

D

REFUND0

51015202530354045

CLASSIFICATION OF NON-LIFE COMPLAINTS( IN %) DURING 2011-13

2011-122012-13

The non-life insurance companies resolved 98.47% of the complaints received during the year. The private non-life insurance companies resolved 99.79% of the complaints registered and public non-life companies resolved 94.51% of the complaints filed against them with the Authority. As on 31st March, 2013, 1235 complaints were still pending with the

16%

24%

29%

31%

Differen types of Fraud affecting insurance companies

Commission Rebating Fake DocumentationCollusion Between Parties Misselling

insurance companies for resolution, out of which 128 pertained to private sector and 1107 to public sector non-life insurance companies

The pattern of complaints in IGMS (Integrated grievances management system) data as regards non-life insurance industry indicates that claims related and policy related complaints far out-numbered other types of complaints. Out of the total 78,927 complaints during the year 2012-13, 35,793 related to motor insurance business and 30,279 related to health insurance business. Motor insurance and Health insurance constitutes around 70% of the total non-life business. However, it is worth noting that the total numbers of complaints has been showing a declining trend in the past few years, because of the various initiatives taken by the authority.

INTEGRATED GRIEVANCES MANAGEMENT SYSTEM (IGMS)

The Integrated Grievance Management System (IGMS) facilitates online registration of policyholder’s complaints and helps track their status.

A policyholder can make optimum use of this system by giving accurate information about the complaint like the policy number, name of the insurer, complainant’s contact details etc. It would be useful to keep the policy document ready while registering the complaint online.

The Complaint Registration Process involves the following TWO SIMPLE steps:

Step 1 : Register yourself by entering your credentials

Step 2 : Use Registered credentials to register complaints / view their status.

2010-11 2011-12 2012-130

5

10

15

20

25

30

35

40

45

50

CLASS-WISE NON-LIFE COMPLAINTS(IN %) DURING 2010-13

MOTOR HEALTH OTHERS

PUBLIC GRIEVANCES

With the successful implementation of the IGMS, the status of complaints across the industry is available to the Authority on a real time basis. The IGMS is now the repository of the industry’s complaints including the status as well as the various analytical reports on the public grievances. The insurer is first port of call for a complainant and in case he/she is not satisfied with the insurer’s decision, he/she may escalate the complaint online on the IGMS or through the Integrated Grievance Call Centre. All these complaints are now part of a single repository, viz. IGMS.

IRDA also regularly accesses the portal of the Department of Administration and Public Grievances (DARPG), Government of India and ensures that complaints relating to the insurance sector are downloaded and necessary action to get them examined by the insurers is taken.

PROCESS OF FILING A COMPLAINT

If your insurance company does not resolve your complaint to your satisfaction you can escalate your complaint to IRDA. 

If your complaint is suitable for taking to the Insurance Ombudsman IRDA will help you resolve it by taking it up with the insurance company

For disputes where enquiry or adjudication are required you should approach the Consumer Forum or Courts.

National Consumer Dispute Redress Commission

“Merely stating that the complainant suffered from a pre-existing ailment is not enough to repudiate the claim. Onus lies on the insurer to prove firstly that the insured knowingly concealed this material fact from the insurer and secondly that the pre-existing condition has nexus with the medical condition eventually suffered by the insured for which the claim has been raised.”

As stated by State Commission, UT, Chandigarh and upheld by National Consumer Dispute Redress Commission in its judgments in a case of Revision Petition No. 3541 of 2006 (against the order dated. 11/09/2006 in Appeal No. 640/2006 of the State Commission, UT, Chandigarh) of Ms. Pooja Gupta vs. Tata-AIG General Insurance Company.

State Commission which ruled against the District Commission that had rejected the claim petition made by the complainant on grounds of ‘pre-existing medical condition’ prior to date of policy and ‘incorrect particulars’ given by the complainant while seeking new policy after lapse of the first policy and that the policy opted for by the complainant

JUDGEMENTS

without plan ‘A’ relating to Accident and Sickness Medical expenses did not give sickness benefit cover to the complainant as mentioned as grounds for repudiation of claim by the Insurance company.

In an appeal against the above order, the State Commission came to the conclusion that, in this case, emergency evacuation and sickness relating to it, are both covered under the policy plan taken by the complainant. This conclusion was reached by comparing the terms of the two policy documents taken up by the complainant , first one for period of 27.07.2004 to 24.10.2004 (90 days of her one year stay in France) and subsequent one for 270 days from 06.11.2004 to 02.08.2005.

On second ground of repudiation, question of pre-existing condition, the State commission noted that in the policy, the term ‘pre-existing’ is defined as a disease which was contracted within two years preceding the commencement of coverage under the policy, for which advice was recommended from a physician or a condition which required hospitalization or surgery within a period of five years preceding the date of commencement of coverage under the policy. The State Commission has also observed that mere statement that Complainant had suffered from a pre-existing ailment is not enough to repudiate the claim. The onus lies on the insurer to prove firstly that the insured knowingly concealed this material fact from the insurer and secondly that the pre-existing condition has nexus with the medical condition referred by the insured for which the claim has been raised. In the present case, the Insurance company has produced no supporting medical evidence to substantiate the claim of Dr. George Oommen who said that the complication in the complainant’s health arose due to ongoing treatment of a pre-existing disease. He has gone on to recommend the rejection of claim on the same.

In the revision petition, the question of pre-existing medical condition has been agitated again through a reference to the hospitalization of the Complainant in August 2003, before the policy was taken. According to the records of the case, the documents relating to treatment of complainant subsequent to 1981 had been made available to the Insurance Company. Therefore, The State Commission has rightly come to the conclusion that there was no concealment of any material fact relating to medical condition of the complainant. The NCDRC also agreed on the ground rejecting the opinion of Dr. George Oommen and held that his role is limited to giving his opinion with reference of pre-existing medical condition.

To the point that emergency evacuation had not been triggered in the case raised by the Revision Petitioner, it has been held that neither in the Revision Petition, nor during the course of the arguments by counsel for the revision Petitioner, any attempt has been made to clarify as to what else was required to be done on behalf of the complainant when she was suddenly taken ill and needed emergency evacuation. Therefore, The NCDRC agreed with the order of State Commission in Appeal No. 640 of 2006 that the attendant hospitalization expenses of Rs. 680863.53 should be reimbursed to the Complainant.

CHANGING TRENDS IN LAWS BY AUTHORITY

Changes in the regulatory environment substantially impacted the industry dynamics

Apart from macro-economic, social, and demographic growth drivers, the evolving regulatory landscape had a significant impact on the growth and profitability trends in the industry. The most notable of them was the price detariffication in 2007 which significantly impacted the premium rates and growth for commercial lines and health insurance.

KEY REGULATORY CHANGES IMPACT OF THE CHANGES

IRDA Bill ClearedLiberalisation of the sector & formation of an independent regulator 1999

IRDA issues TPA regulation & foreign players allowed entering with FDI limit of 26%

Entry of TPAs specifically focused on servicing health insurance business & entry of a number of foreign players bringing capital, strong technical expertise

2001

IRDA issue insurance brokers & corporate agent regulation.

Thrust on insurance distribution through corporate intermediaries. 2002

Entry of Stand-alone Health insurance Players allowed.

Entry of stand- alone health insurance players.

2006

Creation of Indian Motor Third Party Insurance pool & Price Detariffication. 2007

Mechanism to equitably share CVTP losses & significant changes in the premium rates for the commercial lines.

Merger Acquisition Guidelines 2011Enabled consolidation, inorganic transactions in the industry.

Introduction of Declined Risk pool & TP premium increased. 2012 Improvement in overall profitability of

the CV segment .

In the last few years, growth was the primary agenda across competition segments including public sector, old private sector and new private sector general insurance players. Changes in the external environment would continue to present growth opportunities and insurance companies would be better equipped to exploit them based on market insights and internal capabilities developed over the period of time. In order to deliver on the shareholders’ expectations, the companies will be driven to strike a balance between growth, profitability and risk as they go forward. This would entail marked changes in the business strategy and the same would be cascaded to operational decisions related to product design, pricing, channel monitoring, and operational effectiveness. Companies with a one-dimensional focus on growth or on profitability would lose competitive power either due to strain on capital or due to insignificance of the scale. Either way, this would support the emerging trend of overall profitable growth for the industry. Such a scenario would also aid niche players to develop sustainable business models and co-exist with the large players adding to the depth and maturity of the industry.

Choose your insurance company wisely. You need to think of the needs that might arise in the future. Make an informed decision about the type of health insurance. Choose the right amount as ‘sum assured’ depending upon your premium paying capacity. Check the empanelled hospitals. Understand the premium calculation process. Read the fine print. Check flexibility of the policy. Check if the company offers a no-claim bonus or discount. Read reviews and compare policies. Offer yourself for a medical examination before company appointed medical empanelled doctors Do not hide any material facts. Never believe in agents.

CONCLUSION

TIPS FOR CONSUMERS (POLICY HOLDER)

METHODOLOGY

As a group of 4 members we started with brainstorming. In this we come up with various points. We think from the consumer’s perspective and discussed on valid issues. Then we framed a grouping of valid questions which can be part of the study. Out of those questions we concluded to form a final set of 18 questions:

1. What is your sex?

male70%

female30%

SEX

All the consumers which we interviewed:

Female were 30%

Male were 70%

2. What is your age?

74%

22%

4%

AGE

<40

40-60

>60

All the consumers which we interviewed:

Below age of 40 years were 74%

40 years - 60 years were 22%

Elder than 60 years were 4%

3. Do you have insurance policy?

QUESTIONAIRES

yes 96%

no4%

Insurance Policy

All the consumer which we interviewed:

96% people have insurance policy.

4% people do not have insurance policy.

4. Does it cover health insurance?

5. How many members are covered?

6. Insurance Policy which you subscribed is of which company?

TATA AIG

HDFC ERGO

ICICi Lombared

LIC

Bharti AXA

Reliance general Insurance

IFFCO-TOKYO

Bajaj Allianz

SBI General

Others

0 5 10 15 20 25 30

Insurance Subscribed From Top Companies

yes 85%

no15%

Health InsuranceOut of people holding insurance policy:-

85% were also having Helath insurance policy

15% were not having Health insurance policy.

All52%

Adults only48%

Members Covered

52% people out of Health insurance holders said all members of their family are covered under policy.

While 48% said only adults are covered.

26.1%, i.e., maximum insurance holders said they are covered under policy of LIC

While 2nd position was taken by ICICI took with 21.7%

3rd position is shared by Reliance and Bajaj with around 9%.

Rest are as shown in graph.

7. Did you study the Insurance Policy documents?

yes 64%

no36%

Study Policy

8. What is amount of sum assured?

11%

30%

37%

22%

Sum Assured

<200000 200000-500000 500000<

don’t know

9. What is amount of Premium?

40%

16%

16%

28%

Amount of premium

less than 20000 20000-50000 more than 50000

don’t know

64% policy holders said they read policy documents carefully before taking that policy.

While 36% said no.

When asked about amount of sum assured :-

11% were in bracket of less than Rs.2lac. 30% were covered by amount between Rs.2-5lac. 37% were having sum assured more than Rs.5lac.

22% were unknown of it because their insurance was done by their employers (MNCs).

40% were paying premium less than Rs.20000, 16% were paying more than Rs.20000 but less than Rs.50000 and 16% were paying more than Rs.50000

While 16% were unknown of premium paid for the same reason as above of sum assured

10. What is type of your policy?

Floater50%

individual50%

Type of policy

11. Is it Cashless or Reimbursement?

Floater and individual policies are equally preferred by people.

65% people were having Cashless policy and 18% were having Reimbursement Policy.

While 17% were having blend of both.

Cashless65%

Reimbursement17%

Both17%

Policy Model

12. If cashless, then

Whether you have any hospital covered under cashless hospital in your locality?

Yes 81%

No19%

Availabilty Of Local Hospital

Have you ever faced any problem in getting admitted in the hospital?

65% people were having Cashless policy and 18% were having Reimbursement Policy.

While 17% were having blend of both.

81% people said that there is availability of local hospital which is covered in the policy.

While 19% said no.

yes13%

No67%

N/A21%

Addmission Problem

13.Have you faced any problem in claim?

Yes13%

No71%

N/A17%

Claim Problem

14.How much time taken by company to settle claim?

45%

25%

5%

25%

Time Taken For Settlement

<1Month 1month-3months 3MONTHS<

N/A

15.Do you get any No Claim Bonus?

67% people never had problem while admitting to hospital

12% face some type of problem

While 21% didn’t admitted.

71% people never had problem while settlement of claim.

12% face some type of problem

While 17% didn’t applied for claim.

45% said their claim were settled within 1 month

25% said their settlement was done within time period of 3 months but more than 1month.

5% got settled their claim in more than 3 months

While 25% didn’t attempted this.

Yes33%

No38%

N/A29%

No Claim Bonus

16.Have you get any chances to report against insurance company?

Yes8%

No71%

N/A21%

Complaint

17. Are you aware of complaint redress system in Insurance sector?

Yes38%

No46%

N/A17%

knowledge about Redressal system

REDRESSAL PROCESS OF POLICYHOLDERS COMPLAINTS

33% said they got their No Claim Bonus

38% said they didn’t get

While 29% didn’t attempted.

71% said they didn’t ever have complaint against any insurance company for their incovinience.

8% said they filed complaint.

While 21% didn’t attempted.

46% people are unaware of Redressal system in insurance sector.

37% have idea about it

While 17% didn’t attempted.

SOURCES:

1. ASI HIB Workshop on Health Insurance/ care Regulatory issues 2. WHO statistics 3. IRDA journals 4. Directorate General Of Health services 5. Health Policy Challenges for India: Private Health Insurance and Lessons from the

international Experience by Ajay Mahal 6. Health Insurance in India by Sujatha Rao 7. Different Countries, Different Needs: The Role of Private Health Insurance in Developing

Countries by Denis Drechsler, Johannes Jütting 8. Health Insurance in India by Kasturbhai Lalbhai 9. Health Insurance For The Poor In India by Rajeev Ahuja

BIBLOGRAPHY

NODAL OFFICE OF THE COMPANY

HEAD OFFICE OF THE

INSURANCE OMBUDSMAN

IRDA (INSURANCE REGULATORY & DEVELOPMENT AUTHORITY)

CONSUMER FORUM

STATE & NATIONAL

SUPREME COURT (SC)

10.Health Insurance - Wikipedia

“THE HEALTHIER YOU ARE, THE BETTER YOU WILL PERFORM. VALUE YOUR HEALTH AND FITNESS. THERE IS ALWAYS TIME TO MAKE TIME”. -@ BROOKE GRIFFIN

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