Companies & Sectors
Competition Commission to probe five entities including Cipla for anti-competitive practices

As per the complaitn, five entities, including pharmaceutical company Cipla and a state-level trade body are allegedly engaged in anti-competition practices in granting stockist licence for medicines in Himachal Pradesh

Competition Commission of India (CCI) is probing allegations of anti-competitive practices against five entites Cipla, Macleods Pharmaceutical, FDC Ltd as well as trade body Himachal Pradesh Society of Chemist & Druggist Alliance and its President.

 

The complaint has been filed against the five entities for allegedly engaging in anti-competition practices in granting stockist licence for medicines in Himachal Pradesh.

 

Last month, the CCI in its order had said, "...The Commission is of the opinion that there exists a prima facie, case to direct the Director General to cause an investigation into the matter".

 

The fair trade regulator observed that Himachal Pradesh Society of Chemist & Druggist Alliance appears to be controlling and regulating the appointment of stockist-ship of each and every pharmaceutical company in Himachal Pradesh.

 

As per a complaint by filed by one Rohit Medical Store, the Society compelled the pharmaceutical firms to grant stockist-ship in the state to those persons who had obtained NOC from it.

 

The complaint alleged that it was not being granted stockist-ship of Macleods Pharmaceutical, FDC and Cipla due to the condition imposed to obtain NOC from the Society. In its submissions to CCI the complainant also placed on record a CD wherein the President of the Society in a conversation with employees of Macleods was emphasising that NOC was a must.

 

"The evidence placed on record...Shows that no one can be appointed as the stockist of any pharmaceutical company in Himachal Pradesh without the NOC (No objection Certificate) of Himachal Pradesh Society of Chemist & Druggist Alliance," CCI noted.

 

The regulator has asked the Director General to submit his report within a period of 60 days from the communication of this order.

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Group mediclaim pricing of govt insurers: Are corporate clients being duped?

CAG had pulled up government insurance companies for incurring huge losses on group mediclaim. Even today, the premium can be low and there can be huge variation in two quotes received from the same insurer. Are insurers throwing risk to the wind?

Insurance companies do not have the flexibility of pricing health insurance premium for retail buyers, since their features and prices are approved by the Insurance Regulatory and Development Authority (IRDA). But they can price their group insurance premium according to market forces and negotiating skills of the companies aided by their brokers. However, are brokers doing their jobs as an independent advisors who are supposed to work in the best interests of their corporate clients, or are clients being taken for a ride by government insurance companies and insurance brokers? We have just come across an astonishing case where the group insurance premium quotes differs hugely from the previous year to this year and then between the quotes of two different offices of New India Assurance.

 

New India Assurance gave a quote of Rs6.47 lakhs for covering 324 employees without the involvement of a broker and gave another quote of Rs3.48 lakhs for covering 342 employees of the same corporate, which was through a broker! How can a broker’s quote for a higher number of employees and which includes their commission, be at half the price of the quote that was sought directly from the insurance company for lesser number of employees of the same corporate?

 

Existing group mediclaim premium for 354 employees

Quote from New India Assurance for 324 employees (no broker)

Quote from New India Assurance for 342 employees (with broker)

Quote range from different insurers for 324 employees

Rs7,95,509

Rs6,47,841

Rs3,48,837

Rs3,48,837 to Rs11,88,207

 

In any case, this quote was a sharply lower than the previous year, leading to a suspicion that the previous year’s quote was highly inflated. Some reduction in the quoted premium was justified as this corporate had claims ratio of only 30%-33% in the current and previous policy year. But if the broker’s quote is ridiculously low, why can’t something similar be offered directly to a corporate and that too after removing broker commission? When we enquired with New India Segar Sampathkumar, GM, New India argued that the difference in quote could be because they came from two different divisional offices! Well, do they have separate actuaries for different offices whose risk assessment would be so radically different?

 

Now, here comes the interesting part. After Moneylife highlighted the drastic difference in the premium, New India drastically changed the quote. The broker quote went up from Rs3.48 lakh to Rs4.90 lakh and the direct quote went down from Rs6.47 lakh to Rs4.67 lakh. What it means is that these quotes have no sanctity. The insurer and the broker work in league to milk the corporate client with hugely inflated premium, unless the corporate client wakes up and starts enquiring.

 

The questions that arise in this case and that need IRDA enquiry are as follows –

  1. Does it mean that the broker did not care to negotiate the current policy and only scrambled to get best quote due to competition? The next best quote broker got was from private insurer at Rs4.02 lakh. It is still half of what the corporate paid in the previous year.
  2. Why does quoted premium by different insurers have such huge variations for the same cover? The range is from Rs3.48 lakh to Rs11.88 lakh!
  3. Is the premium pricing by Government insurance companies arrangement the Dos have to brokers and less to do with scientific risk-based calculation?
  4. Is there is any pattern to the pricing and a method of ensuring that we get the best possible quote from a Government insurer? Otherwise, it would seem that individuals and companies are left to the mercies of insurance brokers. 
  5. How can the same divisional office of Government insurance company give two quotes and that too the quote from broker at half the price?
  6. Is there some understanding between insurance company and broker that they want to protect the business of the broker for a consideration?
  7. Why is the retail mediclaim premium fixed? Even if you bypass an agent and send offline proposal form directly to the insurance company office, the premium remains the same as the insurance company office put its own code to get the commission.
  8. Why do retail mediclaim policyholders get a raw deal with lack of cashless at high-end hospitals while group mediclaim policyholders get substantial premium discounting, cover for pre-existing conditions, maternity as well as cashless at the same hospitals that were excluded for retail customers?

        9. Are Government insurers still underwriting group health insurance at losses?

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COMMENTS

ABHA CHAWLA MOHANTY

4 years ago

THE PROTECTION TO COMMISSION CAN BLIND ETHICAL MARKETING???. IS IRDA BLIND ...??

nagesh kini

4 years ago

The PSU Insurance companies make a lot of money on corporate health cover which is often heavily cross subsidized by fire, earthquake,SRCC,aircraft damage and other covers to the same large corporates where the claim ratios are extremely low.
The corporate clients are pampered with custom made policies that include pregnancy, dentures, spectacles at low premia that are out of bounds to others. The insurers settle their claims, even fake and inflated ones extremely fast lest they forfeit this lucrative business!

REPLY

CA PRADEEP AGARWAL

In Reply to nagesh kini 4 years ago

THERE IS A LOT OF TRUTH IN IT, MANAGEMENT CLAIMS ARE THE FASTEST TO BE SETTLED AND FURTHER THEY ADVISE WHAT AND HOW TO DO.

PRABHAT

4 years ago

THE LOSES UNDER MEDICLAIM POLICY IS MAINLY BECAUSE OF INFLATED CLAIMS .
IT IS SUGGESTED THAT THERE SHOULD NOT BE 100% REIMBURSEMENT . SOME % MUST BE BORN BY PATIENT , SO THAT HE KEEP WATCH ON BILLING .
FURTHER THERE SHOULD BE NO CLAIM BONUS SYSTEM LIKE VEHICLE INSURANCE .

REPLY

CA PRADEEP AGARWAL

In Reply to PRABHAT 4 years ago

actually, change it from Cashless to reimbursement of claim and can dramatic reduction in both Vehicle and Health policies.

MOHAN SIROYA

In Reply to PRABHAT 4 years ago

Yes ,thre is NCB like "Vehicle Insurance" with a maxi cap.

PRABHAT

In Reply to MOHAN SIROYA 4 years ago

LET IRDA MAKE IT FOR ALL COS.

vinay kashelkar

4 years ago

It is true that each Divisional Manager has been empowered to think his own way. Before Nationalisation there used to be ONE UNDERWRITER in each insurance company (which is present in today's private insurers). After Nationalisation each Divisional Manager has become Underwriter. The Clients, Agents and other Development Staff have to dance according to wishes of respective Divisional Manager. This does not mean that each Divisional Manager is prudent enough to handle any type of business. But unfortunately this is a fact.

In case of Private Insurance Companies there is one authority sitting in their Operating Office who is definitely prudent in Underwriting the business.

REPLY

ABHA CHAWLA MOHANTY

In Reply to vinay kashelkar 4 years ago

PRUDENT IS OUTDATED?

Krishna

4 years ago

Dear Sir,

I recently had a car accident and am in the process of claiming insurance money due to me. All papers pertaining to the vehicle are up to date as are relevant documents required for putting up the claim viz. FIR with local police, photographs etc. I feel that i am being shortcharged by the insurance company. Kindly advice me as to how i can get in touch with you/your support team

Regards

Krishna.

Gopalakrishnan T V

4 years ago

With the concept of Mediclaim insurance and Cash less treatment based on Insurance policies, the ethics in medical care and health of people have been given a go bye. The first question the medical professionals ask the patients the moment they go to a hospital even for an emergency is that whether the patient has insurance. In case insurance is there all the bills are inflated and both insurance companies and corporates are taken for an excellent and big ride. The pricing and the need for expensive treatment are not questionable and even if some one suffers from cold, the medical expenses come to thousands. All sorts of medical tests have become an order of the day for any small illness and Doctors have a unique way of convincing the patients to undergo the tests exploiting the ignorance of the patience and the patient and his helplessness.If one dares to question, his bill and health will get a special treatment which he cannot question anymore. There are no checks and balances on the practices followed by medical practitioners, hospitals and corporates. Money plays an important role and above money no ethics have any value.

REPLY

uttamkumar dubey

In Reply to Gopalakrishnan T V 4 years ago

Yes, this is very important issue need to be addressed.
And i think insurance companies are also aware of it.And they discourage any other hospital which is not linked.

Plus any grade of hospital without offering any quality products and services try to sell patients forcing regular visits etc.

Further Hospitals have devised way to siphon-off extra money from the patients above the amount they receive from insurers.They add some unnecessary charges in the name of non-medical item.

ICU has become a money-making machine for any hospitals and they prefer to prolong patient stay in ICU.

BUT all these will again point to IRDA and final poor and incompetent governance, and PMO.And thats the dead end with no solution and we will have to live with it :(

uttam

MOHAN SIROYA

4 years ago

1Thank U Mr. Raj for this scoop piece. But is IRDA hearing whom U posed the questions for answers ?
2. In fact such in-consistencies for Group Policy premium has been going on since time immemorial and same way , individual policy holders get bleeded ,especially the Seniors, under the cloak of "Heavy incurring losses".
3. It will be a youman service if the Authority can fix some standards , guidelines and Claim versus premium rates ,by suitable increase in Corporate Group Insurance policies and pro-rata reduction in the high premium rates charged for individual medi-claim policies especially in the category of Seniors.
3. In fact , there is a strong case in percentage reduction of premium rate, in case of those individual policies where there has been "NO Claim", especailly after the maximum percentage of NCB is already over. Simultaneously the Insurer must stop charging 2 percent ( or is it 2.5?) extra load for each advancing year premium .

Saumil Mehta

4 years ago

Group mediclaim is a huge racket where Insurers willingly make losses by charging premium way below any common sense would dictate. The Insurers then tell all and sundry including IRDA that health is a losing business, and charge fancy premium (prices have gone up by as much as 50% for me in 3 years despite there being no claim) on individual mediclaim policies.

Everyone knows it. Everyone ignores the truth

NSE to launch debt segment on 13th May

NSE's platform is expected to bring more transparency and credibility to the way debt securities are traded, besides attracting more investors to this segment

National Stock Exchange (NSE) said it would launch a separate debt trading platform on 13th May and would list nearly 400 securities for retail and institutional investors.

 

"A total of 22 securities would be available for retail dealings, while 376 securities would be admitted to dealings on the institutional platform," NSE said in a circular.

 

In the separate debt segment, banks, insurance companies, pension funds, provident funds and retail investors can become trading members of the bourse and trade in this market. There would be separate order books for retail and institutional investors.

 

"The securities which are made available in the retail and institutional platform on the debt segment shall continue to be available for trading in the capital market segment and wholesale debt segment respectively till further notice," NSE said.

 

Also, NSE will conduct a special mock trading session on Friday at 5.30pm in which members of the debt segment can participate.

 

Among the publicly issued securities that would be admitted to dealings on the retail segment include HDFC, LIC Housing Finance, Power Finance Corp, National Bank of Agriculture & Rural Development (NABARD), National Housing Bank and Power Grid Corp.

 

ICICI Bank, IDBI Bank, State Bank of India, Infrastructure Development Finance Company (IDFC), Muthoot Finance Ltd, L&T Infrastructure Finance Company, Religare Finvest and Shriram City Union Finance, among others would be available for trading in the institutional platform.

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