New Delhi: Suspended since July, the cashless treatment facility by PSU insurers is likely to be restored fully in Delhi hospitals within a week, but the insured might have to pay higher premiums for treatment in super specialty medical centres, reports PTI.
"I am hopeful that cashless mediclaim treatment would be fully restored in seven days. Going forward we will see the component of co-pay gaining more importance. There would be different premiums for different hospitals," Max Healthcare Institute MD Pervez Ahmed said after a CII initiated meeting of hospitals and the Third Party Administrators (TPAs).
Sources said in a week's time each hospital would work out a package rate with the TPAs, which are the facilitators between the insured and the insurer.
IRDA chairman J Hari Narayan had yesterday said the costs of treatment could vary from hospital to hospital in the coming days.
"Markets will get segmented and certainly there would be differential pricing. We have moved away from administered pricing and now prices have to be left to market forces," he had said.
From 1st July, public sector insurance companies had taken off about 150 hospitals from the list of preferred provider network (PPN) that provide cashless hospitalisation services to policy holders under the mediclaim scheme.
Later, the insurers had partially restored the cashless facility for emergency, ICU, cardiac care and trauma.
Mr Ahmed said the hospitals, within 24 hours, would give all the rates to the TPAs, following which they would fine tune different packages for hospitals.
"The insurance companies have asked the TPAs to work on their behalf. Now there would be individual negotiations between hospitals and TPAs. We will do it in seven days and restore the cashless mediclaim fully," he added.
At present, health insurance is a loss-making proposition for many insurance firms as they give more in claims than they collect from premiums. In fact, the claim ratio, which measures this trend, is about 130% for the industry.
There are about eight crore mediclaim policy holders in the country.
Four insurance companies-New India Assurance, United India Insurance, National Insurance and Oriental Insurance-stopped the cashless service because of alleged over-billing by some private hospitals.
Mr Ahmed said in the current scenario, standardised rates are not possible. "The insurers would accept the propositions of the TPAs. We will involve insurers for refining the products," he said.
The industry body will tweak ARN registration and renewal norms from 1 September 2010
After announcing a sharp hike in AMFI Registration Number (ARN) renewal fees across the board in May this year, the Association of Mutual Funds in India is all set to tighten the noose on mutual fund distributors further. The existing guidelines for procuring an ARN number and renewing it will be made more stringent.
"We already have a process in place and we are tightening the same process a little bit," HN Sinor, chief executive officer, AMFI, told Moneylife. However, Mr Sinor declined to divulge any further details and said that the AMFI board has to approve the changes first. When asked if AMFI is considering reducing the fee structure, Mr Sinor said that it was not. The ARN renewal fee was hiked to keep serious players in the market in an attempt to curb mis-selling. Alarmed by the steep hike, some distributors - who were already hit by dwindling commissions - approached AMFI to consider relaxing the fee structure.
Earlier, individuals and corporate employees were required to shell out Rs250 as renewal fee which was increased to Rs2,500. For banks, non-banking financial companies (NBFCs), public limited companies and institutional distributors, the renewal fee was raised from Rs7,500 to Rs2,50,000.
Individuals who pass the AMFI examination are allotted an ARN number. From 1st June, The National Institute of Securities Markets (NISM) conducts the certification for distributors called CPE (Continuing Professional Education).
"Their (AMFI's) idea is to have a good quality distribution setup, but the problem is that there are too many things happening so quickly. In the last one year, they have implemented more changes than what has happened in the last 15 years. I was speaking to a senior official in Singapore who advises various regulators there. They have a well laid-out plan for any regulatory changes. It takes seven years to make the kind of changes which we have done here in (only) seven weeks. All good things will take shape if they are done in the right manner. You can't get up one morning and say I want everything cleaned up overnight. The direction is right but the execution is wrong," said a Mumbai-based certified financial planner (CFP), preferring anonymity.
Currently, individuals and corporate employees are required to furnish a copy of the AMFI certificate, two photographs and the fees at the time of registration. "The current procedure is very simple. They can bring some changes in mandatory requirement of certain documents which will be an ongoing process. This practice is followed worldwide. Globally, they follow far stricter guidelines but the industry is flourishing because the distributors are also making money. Their yield (commission) is around 3% there but in India the regulators have reduced it to around 1%," added the CFP.
Rajesh Krishnamoorthy, managing director of iFAST Financial told Moneylife, "Without specifics of what AMFI will do, it is difficult to frame any opinion.
AMFI will have to balance both the social norm and the business norm. The social norm being - more the number of people associated with the distribution of mutual funds, the better the chances of penetration and growth for the industry. The business norm on the other hand would be - the more the serious players in the distribution of mutual funds, the lesser are chances of investors being misled. So, I think, for AMFI, it is something like what the RBI (Reserve Bank of India) has to do - walk a tightrope - tame inflation (non-serious players), yet help economic (the mutual fund industry's) growth."
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