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IRDA chairman underlines that nobody should be refused an insurance but admits enforcement may be lacking

Speaking at a Moneylife Foundation seminar, IRDA chairman J Hari Narayan also said prohibiting banks from selling insurance products is not feasible in India

J Hari Narayan, chairman, IRDA (Insurance Regulatory and Development Authority), said no party should be refused an insurance policy and disability should not be a ground for rejecting insurance. It is also against the rules to refuse medical insurance to senior citizens, he said. However, he admitted that enforcement on the ground may need to be tightened. He was speaking at a small interactive session organised by Moneylife Foundation with senior citizens and physically challenged. The IRDA chairman said that he would look into the issues raised by the group of senior citizens and activists.

The IRDA chairman later addressed a packed public meeting on the topic whether sensible health insurance is possible in India. On prohibiting banks from selling insurance, Mr Hari Narayan said that this is not feasible in India, though countries like Canada do have such stringent policies. Issues relating to life insurance, mis-selling, bancassurance, lapsed policies and poor grievance redressal were also discussed.

Health insurance is a cause of concern for everyone. With rising medical inflation and annual hike in health insurance premium, quality healthcare seems to be a distant dream, except for the elite who can afford the expensive hospital treatment or pricey health insurance premiums, the activists said.

The common issues that most citizens face are rising health insurance premium, inability of senior citizens' to increase sum insured, TPA (third party administrators) and intermediary issues and restrictive mediclaim policies. There were complains that more and more claims are getting rejected for impractical reasons and cashless facility restricted to few hospitals.

Moneylife Foundation, in a memorandum presented to the Mr Hari Narayan, raised these and others issues along with suggested actions.

Regarding handling health insurance claims, Mr Hari Narayan pointed that the system was working well, by and large. He pointed out that last year out of the 47 lakh claims received, 9.4 lakh claims were rejected. He pointed out that 80% of the claims are met and the industry has paid out as much as Rs5,885 crore. More than half the claims were settled within 30 days. He pointed out that the most frequent claims are from fever due to unknown origin followed by cataract.

Sensible universal health cover for masses is certainly a possibility in India, the IRDA chairman said. The government-initiated products like RSBY (Rashtriya Swasthya Bima Yojna) has done well for the masses with premium as low as Rs400 per family for a cover of Rs30,000 sum insured. They cover primary and secondary health care. Arogya Shree is another success story in Andhra Pradesh which covers tertiary health care i.e. covering only if any procedure is performed. A product, which is a combination of two can be promoted to masses for bulk penetration. This can be offered to certain section of society at nominal cost.

The other half of the population, which is at a higher income level can buy this product at a higher rate, which will still be much lower than an individual mediclaim product. The product may be up to certain sum insured. If anyone needs higher sum insured, they can buy 'top-up' policy to cover over and above the sum insured, which is offered by this mass product, Mr Hari Narayan said.

The seminar was attended by a number of activists, experts and eminent citizens.




5 years ago

The Irda regulator has a dual role of not only supporting the consumer's right but also ensuring the sustainability of the industry, hence an argument ofaccusing a regulator to be pro industry or pro consumer is invalid and wrong. Of all the concerns raised we seem to ignore some obvious facts 1. Although some banks may not be selling the right products currently they (banks) still offer the widest reach as compared to any other distribution that exists in the insurance industry. And anyone can recognize the key to increasing insurance distribution which is a key need is reach. What needs to be done is not prevent banks from selling but ensure a right sell.
2. Medical coverage to senior citizens is definitely a requirement but what do we expect , that the same would be provided for by private institutions. The only way insurance can be affordable to senior citizens is by either ensuring cost of premiums are kept low by subsidizing against premiums of the younger population ( which is unfair to the younger persons who ensure coverage in time) or ensuring adequate provision by the govt in the form of subsidies ( remember even the rsby scheme would not be successful without sufficient govt support and currently rsby schemes may not be sustainable at current rates hence requiring further govt support)
3. Let us not make a mistake of trying to solve social problems by depending on private companies which can only exist if they are profitable.



In Reply to MJ 5 years ago

Right selling by Banks:How to ensure it? Firstly train the Bank staff on products before allowing them to sell.Secondly there should be monitoring on the quality of sales.Can RBI do it?No,then IRDA need to devise mechanisms .Thirdly what is the punishment for wrong doings.This should come under the disciplinary code of conduct for Banks staff.
2.Part of the cost for senior citizens medical insurance should come from Govt like in some western countries.But there are many ills in the present health care system which can be cured by the approach adopted by Narayana Hrudalaya.The premiums are affordable,services are trustworthy and reliable and customers trust the delivery mechanisms.No unnecessary tests and generic medicines at fraction of branded drugs available.


In Reply to PCP 5 years ago

Completely agree that a honest, transparent and fair collaboration between insurer's and service providers would provide adequate control of medical costs thereby reflecting in control of premiums.However considering present scenarios where service providers find no adequate incentive or regulations governing them it seems quite impossible. Hence what is required is a centralized effort ensuring standardization of treatment protocols, costs and recommended usage of generic variants governed by a industry and government recognized body.


5 years ago

IRDA Chairman, should visit to any Banker and see the way the bankers are selling the insurance plans like selling some vegetables, ... who cares every thing is chalta hai in India especially when big players are involved...public is the sufferer


prakash praharaj

In Reply to eajaz 5 years ago

A good suggestion and IRDA should see how Banks are selling insurance!


5 years ago

The chairman may be right on prohibiting banks from selling insurance as he said that this is not feasible in India.
But one thing he can do by not allowing banks selling insurance products - life ,non-life, health from its bank premises or counter under the same roof.
Bank is a broker of the insurance company and it has to open separate offices for doing that business rather than sitting in the branches where the premises is meant for the banking transactions.
executives sitting in the bank and other employees including staffs in cash counter is running after customers to put their money in insurance products to get incentive, bonus and gifts.

IRDA should look into this angle and take necessary steps to stop missale.


prakash praharaj

In Reply to G N GHOSH 5 years ago

You are right.Infact Bank staff are now after cross selling incentives than providing services to banking customers
Secondly they do not understand the product but try to sell which results in misselling.
Thirdly an insurance product needs explaining and time which bank staff can illafford.


5 years ago

Sr citizens should be sold mediclaim as a part of social health care security.It has to be a targeted campaign for all insurer.IRDA must make a must sales campaign.Have we seen an ad campaign for insurance cover for sr citizens?

J Udaya Shanker

5 years ago

I have studied almost all comments. There are several problems in Health Insurance in India. Only one answer to all these problems. IRDA should ask all the insurance companies to design only one type of policy with ratings, deductions, exclusions, terms & conditions for retail customers, group policies. The rating should be only one if the customer goes to either Bank, Insurance company or a Broker. Till then, even the Chairman also cannot answer for the questions raised by sr.citizens/activists. If it is not possible to prohibit insurance products through Bankassurance, minimum the IRDA should take steps to stop selling to Credit Card holders through telecallers. If the IRDA take steps to set up the universal business code for all the Companies/ Bancassurances/Broking firms, then it is possible to solve some of the problems in Health Insurance.



In Reply to J Udaya Shanker 5 years ago

For millions of vehicles , third party liability Policy have been uniformly designed. Even comprehensive motor policy formats are few , with additions , extensions, special features They are sold regularly in the market, within acceptable degree of satisfaction for the vehicle owners.Why not for Health Insurance ?


5 years ago

May the IRDA itrospect and ascertain , how many , above 60, have been medically insured , per standard/Varistha polices for last three years?
What are the obligations for the Insurance Companies, to expand coverage to the sr citizens( like rural sector insurance coverage)?
IRDA as a development Authority , must be true to themselves to enforce the social obligation , in enforcing guidelines for the Insurers.Insurers do not refuge cover , but discourage/ avoid insurance for the Sr citizens.


5 years ago







R gopalan

5 years ago

I am a little non-plussed at the comments. All the really hard-hitting reports that i have EVER read are here in Moneylife.
Are these guys really accusing Moneylife of being pro-IRDA and supporting the chairman.
Its a pity I am not in Mumbai and couldnt attend this event - but even from a distance, it seems like the nasty comments are only from insurance agents. I for one had sent a question to be asked and I see it in the memorandum that is one Moneylife's website. So how come the two angry fellas in this list didnt write in advance?
Wouldnt they have reason to complain if Moneylife had refused to include their views in the memorandum on life and health insurance!
Keep it up Moneylife, if you rattle the agents - you are doing a good job. We want you to be pro-savers not for the commission industry.

Deepak R Khemani

5 years ago

If anybody was expecting solutions to their individual problems by attending this seminar I think they were wasting their time. What was important that we were heard and we includes agents, savers, senior citizens and the media.
A good point was raised by one Senior Citizen and the IRDA Chairman did not know that X-ray films were required to be submitted for reimbursement of claims when they may be required for later medical examinations and follow-ups. Only the copy of the report should suffice, to which he said that he would look into the matter, also as said by Ms Sucheta a memorandum was given to him before the event, let us wait patiently and see what comes out and then we can take it forward from there.
Well done Moneylife team and looking ahead to more programs like these in the future


prakash praharaj

In Reply to Deepak R Khemani 5 years ago

What about a proposal for identifying a group of volunteers to help genuine aggrived consumers. I propose to support Money Life Foundation initiative on this and propose:
(1) We can identify coordinators to guide and follow up cases.
(2) A standard format for registering complaints with respective companies be devised.
(3) The escalation matrix can be defined
(4)A periodical review may be done on the outstanding issues.
This will be similar to Mr Vivek Law's effort through Bloom berg.

Deepak R Khemani

In Reply to prakash praharaj 5 years ago

I think it is a good idea, moneylife already has something similar going on these lines already


5 years ago

it appears that 20-25% rejected. 1 million claims.
no details that most of the claims were from retail,individual policy holders.
the loss made in corporate group policy are shifted over all.
the regulator ,it appears looks after insurers, tpas, brokers, big time claim adjusters.
the individual policy holder,for whose interest the regulator was set up,has been filled with retired, urban oriented ,highly paid (recent increase pay package) ,the policy holders ,on complain, are shunted back to same predator insurers
the regulator should have made known the amount of losing legal battles with individuals.
whenever the insurer is at fault, they are warned.
regarding allowing some people to talk & others disallowed,reminds us of big tycoon AGM proceedings
someone has already remarked " paisa feko, kuch be dekho, (gain)"


kumar krishna

In Reply to suvarnamk 5 years ago

Really? Did you pay to attend? Werent you there free? Did you pay for Tea and biscuit either?

Maybe you are an insurance agent too and so used to grabbing customers' money that you think this too is about paise. I agree with Sucheta - the meeting was not for you insurance agents but for savers.
Are you a member? Did you not receive the mailer and send your question in advance? My question was asked to IRDA chairman by Debashis. In fact, most questions that Debashis was reading were from members... so how come you have a problem?


5 years ago

IRDA Chairman , however, let down the Sr Citizens community , by not addressing issues and unfinished Agenda outlined by Sastry Committee Report.
Hopefully , the task would be laid before the freshly constituted Health Insurance Forum at IRDA.The report being the only piece of well researched subject on Health Insurance for Sr citizens calls for strategic action.Varistha , so ill designed, has not taken off the marketing table.Not even a handful of elders, have availed the policy.Agents are advised not to bring clients above 60.Because of a skewed sales strategy for Sr citizens mediclaim cover, the economics of small number , militates against a viable scheme.This root cause need to be addressed by the Chairman IRDA.
There are other issues to be tackled on a strategic basis.Hopefully, irda with a development stance would take the elder citizens worries to heart.


5 years ago

Next best discussion was in the area of Universal access into Mediclaim.An integrated scheme up from primary care to secondary and tertiary , on need based seems to be logical and need to be standardized like RSBY.A mass based scheme would augur well for APL, leaving out the rich to tailor their own solution duly customized and underwritten as stand alone cover.


5 years ago

It would appear most Agents were interested in getting answer to , how to make Regulator to relax conditions to enable most non compliant claims payable.One was wondering why claim s sare not reported within 24 hrs and submit claim papers within 7 days.Chairman rightly sensed the reasons , attempt at fraud.An industry player endorsed the same and inquired if , it does not happen with cashless , but only reimbursement cases.


Sucheta Dalal

In Reply to Samar 5 years ago

I am glad you said this Mr Mahapatra. As you can see below, they are furious that i did not allow them to disrupt the meeting by ranting against the IRDA chairman on our platform.

We the savers wanted an interesting with IRDA. And of course, we did not expect miracles, we wanted our voice heard.
A double bonus was that the Insurance Ombudsman was also there along with two colleagues. Those who understand the value of this are very happy with the meeting.
After all, everything meaningful action needs to start somewhere, dont you think?

arun adalja

5 years ago

irda chairman is the final authority in the sector but he is can one expect justice from irda?most of the regulatories always favour their members and not worried about common people.

dayananda kamath k

5 years ago

if the irda chairman is of the view that it is not possible to exclude banks from selling insurance it means irda is in favour of misselling insurance. it is the banks which will missell most of the insurance.i have sent two complaints but no response from irda so far. how banks are violating agent norms in selling insurance and how they force customers to go for insurance evn allowing temporary overdrawals.

CCI okays Nippon Life’s proposal to acquire stake in RCAML

The deal, which is valued at an aggregate amount of Rs1,450 crore, is the largest Foreign Direct Investment deal in any Indian asset management company till date

New Delhi Competition watchdog Competition Commission of India (CCI) has approved the proposal of Japanese major Nippon Life to acquire 26% stake in Reliance Capital's mutual fund arm RCAML, reports PTI.

The deal, which is valued at an aggregate amount of Rs1,450 crore, is the largest Foreign Direct Investment (FDI) deal in any Indian asset management company till date.

"Considering the facts on record and the details provided in the notice... and the assessment of the proposed combination, the Commission is of the opinion that the proposed combination is not likely to have any appreciable adverse effect on competition in India and therefore...

approves the proposed combination," CCI said in an order.

CCI noted that Nippon Life, which is a global player in providing asset management and portfolio management services, has no direct operations or presence in India in the same space, except for a 26% equity participation in Reliance Life Insurance Company, a subsidiary of R Capital.

"It is observed from the information available on the website of the Securities and Exchange Board of India (SEBI) that there are more than 40 other AMCs registered with SEBI providing services similar to the asset management services provided by RCAML in India and there are more than 250 portfolio managers registered with SEBI providing similar services," it said.

First announced in January this year, Nippon Life will invest an aggregate value of Rs1,450 crore ($290 million) to acquire 26% stake Reliance Capital Asset Management Company (RCAML).

The transaction pegs the valuation of Reliance Capital Asset Management at around Rs5,600 crore ($1.1 billion).

This deal further expands Reliance Capital's partnership with Nippon Life. In October last year, Reliance Capital completed a 26% stake sale in its life insurance venture, Reliance Life, to Nippon Life for over Rs3,000 crore.

Reliance Capital Asset Management (RCAM) manages around Rs1,40,000 crore assets.

Nippon Life is a Fortune 100 company and the seventh-largest life insurer in the world. It is a leading private life insurer in Asia and Japan.

CCI is empowered by an Act of Parliament to scrutinise high-value deals that could have a bearing on fair competition in the market.

Shares of Reliance Capital closed at Rs287.95 on BSE, down 2.83% from its previous close.


Nifty may stage a slow recovery: Wednesday Closing Report

If today’s lows hold, the Nifty may see a short rally

A weak rupee and dismal global cues pushed the markets lower today. If today's lows hold, we may see a small bounce-back. Today the Sensex hit a high of 16,133, the lowest since 10 January 2012 while it went down to the level of 15,975, its lowest since 13 January 2012. The National Stock Exchange (NSE) saw a volume of 64.55 crore shares which is above its 10 day moving average.  

The market opened sharply lower on weak global cues and the depreciating rupee, which hit a fresh five-month low. The inability of Greece to form a government led to fears of the beleaguered nation discarding the euro, thus worsening the Eurozone crisis. The development led the US markets lower overnight, which also had a bearing on the Asian back that were trading lower in morning trade today.

Back home, the Nifty opened 108 points down at 4,875 and the Sensex tanked 195 to resume trade at 16,133. Meanwhile, the rupee fell to a five-month low losing 47 paise to 54.26 against the US dollar on the Interbank Foreign Exchange market in early trade on increased capital outflows amid strong demand for the greenback. The rupee had touched a record intra-day low of 54.32 on 15 December 2011.

While the opening figure on the Sensex was its intraday high, the Nifty hit this level in a short time with the index touching 4,882. Across-the-board selling saw all sectoral indices in the negative. The market, which witnessed a gap-down opening, was range-bound in subsequent trade.

Concerns of a slowdown in economic growth and a lower opening of the European markets resulted in the benchmarks falling to their mid-session lows in noon trade. At the lows, the Nifty fell to 4,837 and the Sensex fell below its psychological level to 15,975.

Trade continued to be lacklustre in the late session as global cues and the weakening rupee thwarted any recovery attempt. At the close, the Nifty declined 85 points (1.71%) to 4,858 and the Sensex closed 298 points (1.83%) lower at 16,030.

The advance-decline ratio on the NSE was negative at 444:1209.

Among the broader markets, the BSE Mid-cap index declined 0.78% and the BSE Small-cap index dropped 1.11%.

All sectoral indices settled lower. The key losers were BSE Metal (down 2.68%); BSE Auto 2.59%); BSE Consumer Durables (down 1.94%); BSE Capital Goods (down 1.69%) and BSE Bankex (down 1.65%).

Sterlite Industries (up 0.87%) and Bajaj Auto (up 0.47%) were the only gainers on the Sensex. The top losers were Tata Motors (down 7.34%); Tata Steel (down 3.89%); BHEL (down 3.74%); HDFC (down 3.71%) and Hindalco Industries (down3.28%).

The Nifty was led by BPCL (up 2.53%); Power Grid Corporation (up 1.65%); Cairn India (up 1.30%); Bajaj Auto (up 1.08%) and Kotak Mahindra Bank (up 1.02%). Tata Motors (down 7.70%); Tata Steel (down 4.40%); SAIL (down 4.18%); Reliance Infrastructure (down 3.73%) and Jaiprakash Associates (down 3.59%) settled lower on the index.

Markets in Asia settled lower on concerns about the Greek crisis and a tepid loan growth in China's top four state-controlled banks in the first half of this month. The global developments are seen dampening overseas investors' appetite in the region.

The Shanghai Composite declined 1.21%; the Hang Seng tumbled 3.06%; the Jakarta Composite dropped 1.61%, the KLSE Composite fell by 1.60%; the Nikkei 225 fell by 1.12%; the Straits Times slipped 1.58%; the KOSPI Composite tumbled 3.08% and the Taiwan Weighted settled 2.18% lower.

At the time of writing, the key European indices were mostly lower while the US stock futures were in the positive.

Back home, institutional investors-both foreign and domestic-were net sellers in the equities segment on Tuesday. Foreign institutional investors were pulled out Rs184.28 crore and domestic institutional investors withdrew Rs82.85 crore.

Diversified business house Videocon Industries said it will raise $51.02 million (over Rs270 crore) through issue of securities on a private placement basis from overseas market. In a filing to the BSE, the company said it will issue 1,57,50,000 Global Depository Receipts representing 1,57,50,000 equity shares. The stock gained 0.85% to close at Rs171.50 on the NSE.

Pharma major Aurobindo Pharma on Wednesday stated that it has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Lamivudine and Zidovudine tablets in America. The tablets are the generic equivalent of ViiV Healthcare Company's Combivir tablets and are indicated as part of antiretroviral combination therapy for the treatment of Human Immunodeficiency Virus (HIV) infected persons. Aurobindo declined 0.52% to close at Rs105.55 on the NSE.

Indian Overseas Bank (IOB) is likely to raise $500 million this fiscal to fund its business growth overseas. The funding will be through a Medium Term Note (MTN) programme, which is basically a debt instrument with a maturity of 5-10 years. The stock tumbled 2.37% to settle at Rs78.25 on the NSE.


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