BT has been looking at part-sale of its stake in Tech Mahindra for quite some time, but has been waiting for right market conditions to go ahead
As per an RTI reply by the ministry of finance, IRDA has taken several initiatives for senior citizens, but has it made the life of senior citizens any easier?
The reply of the ministry of finance to an RTI query by MV Ruparelia gives details of recommendations by the Sastry Committee and the action taken by the Insurance Regulatory and Development Authority (IRDA) for issues faced by senior citizens as far as health insurance is concerned. While some have been implemented, few are in the draft stage and may get into the final guidelines, while the rest have been rejected citing various reasons. Even though IRDA has taken steps in the right direction, the ground situation for senior citizens is far from easy.
Following are the recommendations made by the Sastry Committee and action taken by IRDA:
IRDA’s response: Accepted vide circular dated 25 May 2009
Ground reality: While mediclaim does offer entry up to 65 years of age and health insurance draft reiterates the same, some insurers are reluctant to underwrite customers above 45 years of age. The “Right to Underwrite” is freely used by insurers to deny mediclaim policy.
IRDA’s response: Accepted vide circular dated 7 March 2009, 25 May 2009 and 31 March 2009.
Ground reality: Has not been effective yet—many mediclaim policies end at age 70, 75 or 80 years; few offer lifelong renewal, although health insurance draft guidelines do specify lifelong renewal. Many senior citizens do not receive renewal notice and have to chase the insurance company to accept the premium payment cheque.
IRDA’s response: This wasn’t accepted completely because in a de-tariffed market, fixing the price is not appropriate. IRDA has issued a circular which restricts insurers to increase premium beyond 75% at the time of renewal of policies for senior citizens.
Ground reality: While it is understandable that premium cannot be fixed in an open market, allowing 75% increase in premium at the time of renewal is a major increase. Moreover, premium is hiked every year, which means that the premium can shoot sky high for senior citizens especially for those already suffering from some disease. Claims based loading is still prevalent in mediclaim policies.
IRDA’s response: Accepted.
Ground reality: While change of TPA may be allowed, many senior citizens do not want services of a TPA and ask for reduction of premium equivalent to the 6% paid to TPA. This is not allowed by most insurers. Also, settlement of claims within 30 days from the date of receipt does not happen in reality. The health insurance draft guideline specifies the settlement of claims should be within 30 day from the date of receipt of all claims documents. This is a vague statement as “all claims document” is subjective. Insurer/TPA keep raising queries to ask for frivolous documentations, which leads to an enormous delay in settlement of claims. Many a times, the claims file is closed on the pretext of incomplete documentation from the hospital, and the insurance company/TPA does not even take the trouble of informing the same to the insured. It takes a lot of persuasion to get the file reopened, which agonises the insured, despite him not being at fault.
IRDA’s response: Both these points are still in the draft stage and hence not yet implemented.
Ground reality: Intimation to TPA/insurer within 24 hours of hospitalisation and claims filing with seven days has led to mechanical rejection of claims.Some claims are rejected even when the insured follows the timelines. No standard processes of confirming intimation from the TPA exist, and the TPA may refuse receipt of intimation by email or assert that the fax was illegible. Government insurers offer an incentive to TPAs for keeping the claims ratio low, which is in direct conflict of interest with the insured and can hamper genuine claims.
IRDA’s response: Not within the purview of IRDA. However, MOHF (ministry of health and family welfare), GOI (Government of India) was requested to look into this recommendation.
Ground reality: IRDA has completely washed its hands off on hospital pricing even though the Air Force Medical College (AFMC) submitted its report on hospital pricing to IRDA after a detailed study. Cashless feature was removed by government insurers in July 2010 without informing the insured about the move, leaving policyholders in lurch—IRDA did not get involved in settling of the issue. Few hospitals are added to Preferred-Provider-Network (PPN) of government insurers, and majority of high-end hospitals are not willing to be part of PPN.
As per the business transfer agreement, Orchid will transfer its Aurangabad API facility, an associated Chennai-based R&D facility and Penicillin and Penem API business to US-based Hospira, the proceeds of which would be used to de-leverage its debt position
New Delhi: Orchid Chemicals & Pharmaceuticals (Orchid) on Wednesday said it will sell various assets including active pharmaceutical ingredients (API) business and a R&D facility to the US-based Hospira Inc for $200 million (nearly Rs1,112 crore), reports PTI.
The Chennai-based firm’s business transfer agreement (BTA) with Hospira includes sale and transfer of its Aurangabad API facility, an associated Chennai-based R&D facility and Penicillin and Penem API business.
“The proceeds from this business transfer will be utilised for de-leveraging Orchid’s debt position and also pave the entry for the company's foray into newer product verticals,” Orchid Chemicals said in a statement.
As on date, Orchid’s debt stood at Rs2,200 crore.
As part of the deal, nearly 830 employees of Orchid would be transferred to Hospira, it said.
“...This business transfer agreement with Hospira will help us fast-track our future growth while maintaining a healthy debt profile in our balance sheet,” Orchid Chemicals & Pharmaceuticals CMD K Raghavendra Rao said.
On getting necessary approvals, the transaction is expected to be completed in the third quarter of Orchid’s 2012-13 fiscal year, corresponding to the fourth quarter (October-December) of the calendar year 2012.
An active ingredient is the substance in a pharmaceutical drug that is biologically active.
Given the current scenario, it is a prudent decision for Orchid to monetise these verticals and bring in cash to de-leverage its debt position and fund newer growth horizons, he added.
Orchid said it would continue to supply its cephalosporin APIs to Hospira in accordance with the long-term supply contract.
Further, Hospira would supply certain ingredients from the Aurangabad facility to Orchid under a long-term agreement that both companies have entered into, Orchid said.
“This agreement builds on the existing product development and commercialisation relationship between Hospira and Orchid,” it added.
“Our decision to acquire Orchid's world-class API facility demonstrates Hospira’s continued dedication to the antibiotics space, enhancing cost-competitiveness and ensuring continuity of supply,” Hospira India MD C Bhaktavatsala Rao said.
Latham & Watkins LLP acted as the international legal advisor and Amarchand, Mangaldas & Co acted as the Indian legal advisor to Orchid.
Orchid Chemicals & Pharmaceuticals develops, manufactures and markets various bulk actives, formulations and nutraceuticals.
Lake Forest-headquartered Hospira Inc is one the world’s leading provider of injectable drugs. In India, the company has a wholly-owned subsidiary— Hospira Healthcare India.