Insurance
Information gap: No handshake

A common databank is needed to make portability work. We don’t have it

Portability will be a non-starter if the features of a policy are not easily portable—as there would be many impediments from the consumers’ angle. There can be a huge issue among the insurers as well, if they cannot, and do not, easily share your data. There is no centralised insurance databank in India which is an essential step to improve the delivery of health insurance in India. The regulator is working on a system of making medical history data available in electronic format across insurers but it is not clear when the system would be up and running.

According to industry experts, insurers, especially in the public sector, don’t have a core system and there is no sharing of data across even divisions of the same company. So, today, it is not easy to port a policy even within the same insurer across divisions. Authenticity of the medical history data with the insurer, in some cases, may be questionable and would lead to disputes after portability. The new insurer is completely at the mercy of the existing insurer to give accurate data.

In such a situation, insurance companies will have to implement the guideline which specifies that the medical details will be shared with the accepting insurer within seven days. Enormous efficiency will be required to achieve this. It may need major changes in processes and database infrastructure to retrieve information of one customer across several years of renewal.

This calls for an agency like the credit bureau, which will run a centralised databank containing all the medical details of customers (pre-existing diseases, claims history, insurance history, coverage limits and so on). There will be a need for a unique customer identification number. The current reports from Insurance Information Bureau are inadequate to achieve this goal. According to Sudhir Sarnobat, “There is a need for an independent agency similar to CIBIL (Credit Information Bureau (India) Ltd) to create a common insurance database. It need not be from the regulator. CIBIL took 10 years; an insurance database can be developed in five years. Insurers may have to put in capital to build it. It can be used to come up with correct premium pricing. The unique ID of the customer will offer ease of information without going to the branch or division of the insurer.” Dr Amarnath Ananthanarayanan, CEO and MD, Bharti AXA General, also feels that, “The evolution of a common database across insurers will be of tremendous benefit for insurers as it will be a risk assessment tool. It will help to understand and access risk and charge the right premium. If an insurer charges high, then they lose the customer; if low, then they will have losses; if right, then they will get customers. Currently, insurers sometimes play safe in underwriting with exclusions to stay out of risk. With a common database, there will be less exclusions and lower premium for good customers who maintain health.” But a database with different attributes of records would be useless. That leads to the fact that medical data of policyholders need to be standardised. The group insurance policyholders’ medical data is not captured by all insurers. Some data may be available with TPAs but it may be incomplete. The common database may not give complete information if data is missing.

With databases comes the issue of data protection. In the US, the Health Insurance Portability and Accountability Act (HIPAA) strictly regulates the sharing of health information; you have to give your written permission. For example, without your authorisation, your medical service provider cannot give your information to your employer, use or share your information for marketing or advertising purposes, or share private notes about your healthcare.

User

COMMENTS

Hoshang Nekoo

6 years ago

Wait and watch. Try gathering the data of experience of ease and difficulty an insured person faces to get the policy transferred, and how many have taken advantage of it. How many have switched over from PSU insurers to Private Insurer and vice a versa. Cake walk will be for insured person below 45 years of age with no claim history. For the rest time will tell.

Aparna Ramachandra

6 years ago

The thoughts are noble and if it happens it will be a landmark in consumer activism. Am being skeptical because the insurance industry thrives on false information, misselling and paybacks. So expecting transparency is an utopian thought. However if we pursue and kind of make it mandatory we might succeed. Like the reluctant banks who now have to share their data with CIBIL

Tips on portability: Want To port?

You will need lots of support

The terms and conditions of an insurance contract are not easy to understand. Buying correct health insurance is not easy; porting of insurance will be as difficult. You have to accept the terms of the new insurer and may lose some of the benefits you already had with the existing insurer. Here are some tips for you.

•    Advises Fali Poncha: “Policyholders have to understand the sub-limits, co-pays and other terms of the new policy before porting. It will entail finding a policy with more or less same terms. If you want to increase the sum insured, the differential sum insured will be treated as a new application and rules for the new customer will be applicable for it.”

•    Some private insurers have already started plans to poach customers with portability. If you already have a policy with one of the four public-sector insurers with a life-long renewal, why would you port to a private insurer offering maximum renewal age? Look for private insurers with life-long renewals.

•    Check if you will need to undergo a medical test.

•    Give ample time for the portability process to work. Apply for portability at least 45 days before the expiry of the existing policy. This will give time to the new insurance company to do a medical test, retrieve information from the existing insurance company and then underwrite and accept the risk.

•    If you are confused, don’t port. The customer looking to port should preferably employ a broker to get good guidance and advice regarding the insurance company to select. The customer does not pay the broker.

User

COMMENTS

Hoshang Nekoo

6 years ago

Mr. N Kini, When VRS was declared in Banks and other companies Insurance Companies including Life Insurance co. advertised in the media inviting people to become an agent. Free walk in interviews etc. The new recruit had to undergo Training as stipulated by IRDA. The class room attandance, the final test taken at many centers and with what knowledge on insurance the candidate came out to go into the field is anyone’s guess. Most of them got the Visiting Card printed as an Insurance Advisor licensed by IRDA. With many insurance agents in the field for over3-4 decades never called themselves an insurance advisor. What happened next was they started eating into established business of senior agents by offering so called incentives to the clients. With no field experience and the product knowledge such agents are now in plenty. Therefore do not compare an agent of repute with new recruited agents who is only out to complete the quota and grab some ones business. It is for the person taking the policy to verify experience and standing of the agent before taking out the policy and regret later.

nagesh kini

6 years ago

Thanks Raj for your two reports on Health Insurance Portability.
What IRDA has done in the name of Portability is a half baked circular, if at all it can be considered to be one. It is full of gaping loop holes that make the entire exercise abort before take off.A lot of them need to be ironed out before it is operationalized on july 1,2011.Else it will be like the cartoon literally jumping from the frying pan into the fire.
Unfortunately more particularly for the elders, moving away from the existing insurer and another refusing cover can be dangerous to say the least.
IRDA has necessarily to build in safeguards to come out uninjured from this 'loveless marriage' with a seamless divorce.
MoneyLife with the Insurance Brokers needs to come out with BASIC policies with essential features.After the common insured seek simple Health Hospitalization covers. More light needed on Critical Illness covers that most agents don't promote, god knows why!
In response to Hoshang Nekoo, I'd like to clarify that most of them indulge in mis-selling as they are not at all conversant with the policies. They just want to complete their quotas. They simply play the vanishing trick when it comes to rendering assistance in filing claims. I know of an agent advising a senior CA that he'd have to forego no claim bonus for a overnight hospital claim on a policy where the NCB is a mere 5% increase in the sum insured that has a 30% cap that was reached. Most of the agents are part timers not fully equipped to answer deeper queries.

Hoshang Nekoo

6 years ago

Why do you advocate going to a broker. An agent gives much better service to Medicalim Policy holders then a broker in the event of a claim. IRDA has made agent stick for years together to one Life and General Insurance Company irrespective the insurance company is good or bad in its dealing or has no better product to offer which the other competitor insurance company has. On the other side IRDA gives license to a newly appointed BROKER to deal with several insurance companies be it Private or PSU having at their disposal insurance product to suit customers need. Therefore don’t blame the agent who is also licensed by IRDA to be in business that is left with only the product of his insurance company is suitable or not suitable to persons need. In any way the agent is honest to sell his Insurance product he is given to sell and in no way cheating the customer. Perhaps IRDA will put a thought to remove the restriction on agents who are agents for 2-3 decades.

ED registers money laundering case against Kalmadi

The ED has registered the case under the Prevention of Money Laundering Act (PMLA) against Suresh Kalmadi as he had a role in all financial dealings of the OC, by virtue of being its chairman

New Delhi: The Enforcement Directorate (ED) has registered a money laundering case against sacked Commonwealth Games (CWG) Organising Committee (OC) chairman Suresh Kalmadi in connection with financial dealings during the 2010 Commonwealth Games, reports PTI.

The Directorate, which had earlier charged the Member of Parliament (MP) from Pune for alleged violation of foreign exchange rules, has now moved the court to seek his custody and record his statement.

Mr Kalmadi, arrested by Central Bureau of Investigation (CBI), India’s premier investigating agency, last month on charges of cheating, conspiracy and corruption in the Timing, Scoring Result system (TSR) of the Commonwealth Games, is presently in judicial custody.

Sources said the ED has registered the case under the Prevention of Money Laundering Act (PMLA) against Mr Kalmadi as he had a role in all financial dealings of the OC, by virtue of being its chairman.

The findings of the CBI and the ED in the entire Games probe were also taken into account while pressing the money laundering charges, sources said.

The ED, after obtaining the court’s permission, will also question Mr Kalmadi in connection with the money laundering and foreign exchange cases that it has registered in the overlays and the Queens Baton Relay (QBR) scams.

The agency has also asked Mr Kalmadi to furnish details of his bank accounts, movable and immovable properties, instances of foreign travel before the Commonwealth Games held last year, and transactions of foreign exchange in the last few years.

Sources said Mr Kalmadi has asked for a few weeks’ time to furnish these details to the ED.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)