Insurance
IRDA health insurance guidelines help cumulative bonus and claim in overlapping policy periods

IRDA health insurance guidelines issued last month will ensure that your cumulative bonus does not go down to zero after you file a claim. Claim in overlapping policy periods will get benefit of available sum insured in the two policy periods. Will the insured misuse it for planned hospitalisation?

Insurance Regulatory and Development Authority (IRDA) health insurance guidelines addresses several issues like lifelong renewals, special provisions for senior citizens, transparency in premium and claims based loading as well as restricting role of TPA to claims processing and not settlement. Other important change includes ensuring that your no-claims-bonus (NCB) does not go down to zero if you lodge a claim. Claim in overlapping policy period will benefit from having sum insured in the two policy periods being available to pay your hospital bill.

 

NCB change – IRDA health insurance guidelines states that insurers may offer cumulative bonuses on indemnity based health insurance policies (mediclaim), which shall be stated explicitly in the prospectus and the policy document. If a claim is made in any particular year, the cumulative bonus accrued may be reduced at the same rate at which it is accrued. Cumulative bonus shall not be allowed on benefit based policies.

 

The new change will surely help mediclaim policyholders. But, will insurance companies be keen to offer NCB at all? Some insurance companies have dropped the NCB feature and possibly more will follow as the policyholder will not fear filing low value claim as NCB will not be completely lost. Earlier, the insured thought twice before filing low value claims due to NCB going down to zero.

 

For e.g. Many mediclaim policies offer 5% NCB every claims free year with a maximum of 50% NCB. If your base sum insured (SI) is Rs2 lakh then after 10 claims free year, the NCB will give benefit of additional 50% of base SI which is Rs1 lakh. If there was claim in 11th year, the policyholder used to lose all the NCB. It would go back to zero NCB. With the new rules given in health insurance guidelines, having a claim in 11th year will only reduce the NCB from 50% to 45%.

 

Insurer and not TPA to settle health insurance claims

 

The second important change is claim overlapping policy period. There have been real examples of policyholder hospitalised for a duration which falls across two policy periods. The insurance companies would consider the sum insured available on the day of hospital admission and ignore the sum insured of the subsequent policy period. Under the new guidelines, the insurance companies will have to consider the leftover sum insured of the existing policy and new sum insured as the claim is overlapping in the two policy periods. While this will certainly benefit policyholders, it is possible to misuse this feature for planned hospitalization. It can be done by manipulating the dates to overlap the two policy periods for specific procedures planned in advance.

 

IRDA health insurance guidelines states – If the claim event falls within two periods, the claims shall be paid taking into consideration the available sum insured in the two policy periods, including the deductibles for each policy period. Such eligible claim amount to be payable to the insured shall be reduced to the extent of premium to be received for the renewal/due date of premium of health insurance policy, if not received earlier.

 

For e.g. Policyholders may have mediclaim of Rs1.5 lakh SI of which only Rs1 lakh SI is available due to prior claim of Rs50,000. If the insured if hospitalised for a period that overlaps two policy periods, then the insured can benefit from leftover SI of existing period (Rs1 lakh) and SI of the new policy period (Rs1.5 lakh). If there is a claim up to Rs2.5 lakh, the policyholder can expect full recovery of claim amount from the insurance company subject to other sub-limits imposed by the contract. If the insured has not paid the premium for the new policy period, then it will be deducted from the claim amount.

 

Other stories by Raj Pradhan
 

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COMMENTS

MOHAN SIROYA

3 years ago

Dear Raj Pradhan

New India Assurance Co. is playing truent. It has pegged down my policy ( sr. citizen)NCB to 30 percent of the sum insured. AS per this, IRDA guideline says it has to be 50 percent.

Can you enlighten ,if this amendment is from prospective period or applicable to existing renewed policies also ?
Thanks and regards

arun adalja

3 years ago

in case of overseas travel insurance new india asked me to pay 50% extra premium if policy is extended for another 180 days.here they issue policy for 180 days with one premium and for another 180 days you have to pay 50% extra premium.is there any justification for such condition?

s joshi

3 years ago

stop this fraud and illegal call centers

i am a senior citizen, few day ago i was received a call some Mr. Pradhan(no.-8802963703) he sad, he was calling from irda compliant department and i will help to withdrawal your old insurance money and he transfer call to some mr. lamba (his sound like old man ) he sad, he is a senior officer at fund department and fund received you with in a 20-25 days but you will buy the comparison policy of total fund's 10% amounted policy than you received that amount.

this is all fraud but unfortunately i am trapped in it than my son was complaint this no. and its location was locate at noida Sec-2 near narula's , my son sad to me that there was lots of illegal call center working at sec-2 noida doing this type of frauds. some address details :-(1) basement D-61, sec-2, noida (2) c-23 iind floor, sec-2 noida, (3) C-48, sec- 2, noida, (4) c-29, sec-2 (5) c-31 iind floor sec-6 noida. they are not registered at trai in telemarketer.

why government not stop this fraud and illegal call centers.
thanks

s joshi
Ludhiana, Punjab

nagesh kini

4 years ago

A lot of credit for IRDA's new guidelines ought to go to MoneyLife efforts and the active follow up with the former Chairman, Mr.Hari Narayan.
Gaurang Damani's persistence with his PIL has also played a major role.
A clear case of Peoples' Action being heard!

arun adalja

4 years ago

inspite of guidelines by irda i think insurance companies does not follow them.they just ignore it and they will find out some loopholes to avoid it.

PRABHAT

4 years ago

THESE ARE GOOD PROVISIONS.BUT WHETHER THESE ARE IMPLEMENTED AND AVAILABLE TO EXISTING POLICY HOLDER AS I AM A SENIOR CITIZEN AND HAVING THE POLICY FOR THE LAST EIGHT YEARS WITHOUT ANY CLAIM TILL DATE .

MOHAN SIROYA

4 years ago

I hope, Mr Raj Pradhan has considered this important point that IRDA's guidelines cover only the Public sector Insurance Complanies ,and all private insurers. They are free to adopt their own standrds. FOr instance ,if a seotugenarian with a mediclaim policy with accumulated NCB of more 7 years, can not be allowed to deport the policy by MAX BUPA . They not only will deny the entire accumulated NCB but will even charge more than double the yearly insurance premium than what the senior citizen has been paying to the PSU Co. I have thee cases on record.

REPLY

raj

In Reply to MOHAN SIROYA 4 years ago

Dear Mr Mohan Siroya,

IRDA health insurance guidelines are for both Government and Private insurance companies. The same is true for portability guidelines. For more on portability current status, Moneylife cover story will give clarity. It will be available in the market next week.

MOHAN SIROYA

In Reply to raj 4 years ago

Dear Raj

1.I just happened to go thru' the PDF copy of 'Extraordinary Gazette of India' dt. 13 th Feb. 2013 on the subject. Although I saw the provision of giving benefit of accuumulated Bonus by the deported Insurer alongwith the basic risk cover amount of the policy ; it is silent about on what amount the new Insurer will charge the premium. An illustration is given that if the basic policy cover amount is Rs. 2 lakhs and if Bonus is 50K, the New Insurer should offer 2.5L policy amount. If the Co. does not have 2.5L slab, then it can give the nearst higher amount; in this case Rs. 3 lakhs.But the benefit limit of re-imburement amount will remain confied to Rs. 2.5 L. Further it is not clear on what amount the premium will be calculated ;on 2.5 L or 3 Lakh? Common sense says, it has to be 3 lakhs. So here , the IP will have to pay premium on 50k more amount.
2.However, I did not notice any clause, which specifically says that the rate of Annual Premium for the covered risk amount will remain the same as was before 'Deporting' with the new company. If it is ,indeed there, I would be grateful if you can enlighten me on that, where and whihc clause/page. .

Regards

Mohan Siroya

MOHAN SIROYA

In Reply to raj 4 years ago

Dear Raj Pradhan

Sorry, I beg to differ. I have quoted the instance of Max Bupa and this is from Horse's mouth. I myself wanted to Deport my 5 Lakh Medi-Claim policy which is with NO Claim accumulation since I had purchased--- 7 years back)with New India. MAX BUpa flatly "Refused" to give any benefit for "No Claim Bonus" accumulated ; and quoted me an annual premium which was almost double than what I am paying to New India. When questioned Under IRDA guidelines, they said, That is not Binding on them. My Complaint /seeking clarification from IRDA still remains unanswered.
If interested, can give some instances of other persons too .

Thanks
Mohan Siroya

PRABHAT

In Reply to MOHAN SIROYA 4 years ago

PL. REFER YR. MATTER TO IRDA

raj

In Reply to MOHAN SIROYA 4 years ago

Dear Mr Mohan Siroya,

IRDA guidelines are applicable to both Government and Private insurers, but still gives them lot of freedom for premium pricing and on NCB handling.

Please read Moneylife cover story on health insurance portability which will be available in the market this week.

It will answer all your questions related to portability. If you still have questions after reading the cover story, please let me know.

Vinay Joshi

In Reply to MOHAN SIROYA 4 years ago

IRDA, Feb'13 regulations are across the board.

Regards,

MOHAN SIROYA

In Reply to Vinay Joshi 4 years ago

Yes, these are from Feb. 2013. I have talked of the postion till Dec. 2012

HDFC Bank cuts base rate by 10 basis points to 9.6% from 30th March

HDFC Bank's new base rate of 9.6% is the lowest among all lenders including SBI, which has a base rate of 9.7%

HDFC Bank, India's second largest private sector lender said it would cut its base rate by 10 basis points to 9.6% from 30th March. HDFC Bank is the first lender to cut base rate following a 25 bps cut in repo rate by the Reserve Bank of India (RBI).

 

At the same time, the benchmark prime lending rate (BPLR) of HDFC Bank is expected to be slashed by similar margin to 18.10%.

 

Post this reduction HDFC Bank’s base rate will be the lowest among major banks. Among other private banks, ICICI Bank’s base rate is 9.75% since April 2012, while that of Axis Bank is 10%. At present, State Bank of India (SBI), the country's largest lender offers a base rate of 9.7%.

User

COMMENTS

vivek sharma

4 years ago

I think headline should be ,' HDFC Bank' cuts rate and not HDFC cuts rates, because HDFC is not supposed to follow base rate.

RTI Judgement Series: Anti-corruption branch of Delhi government took a year for an inquiry report

While allowing an appeal, the CIC noted that the ACB itself fist took three years to conduct the inquiries and then kept the report for over a year before forwarding it to the Vigilance Department. This is the 66th in a series of important judgements given by former Central Information Commissioner Shailesh Gandhi that can be used or quoted in an RTI application

The Central Information Commission (CIC), while asking the Public Information Officers (PIOs) of Art Culture and Language department and Anti-Corruption Branch (ACB) of the Government of National Capital Territory of Delhi (GNCTD) to provide copies of an inquiry report expressed displeasure over the fact that it took these departments’ years just to send the report to other department.

 

While giving this important judgement on 9 April 2010, Shailesh Gandhi, the then Central Information Commissioner said, “(the) ACB itself fist took three years to conduct the inquiries and then kept the report for over a year before forwarding it to the Vigilance Department. The Vigilance Department took another year before forwarding it to Art Culture and Language department. The Commission expresses its distress at the extraordinary slow methods in which inquiries are conducted and inaction becomes the primary characteristic of such events.”

 

New Delhi resident Dharam Raj, on 4 August 2009, sought information about a complaint filed with ACB on embezzlement of funds in 1996     from the Art, Culture and Language as well as ACB of the GNCTD. Here is the information he sought...

 

1) Present status of the enquiry report submitted by the ACB to the CBI in the complaint No. 4/96 dated 10/01/1996.

2) Reason for conducting the enquiry by the CBI, ACB when it was predetermined that no action will be taken.

3) Details of approximate quantum of expenditure including the cost of human resource that had been incurred from the Govt. exchequer so far for conducting the enquiry against Mr SK Semwal and the result derived from the expenditure incurred.

4) Name(s) of the departments and the concerned person to whom CBI had made requests to provide the records related to the Semwal's reported corrupt activities.

5) Details of factors, which played role in providing the miraculous relief to the SK Semwal when he had already committed several crimes.

6) Whether there is any provision in the CrPC or IPC enquiry report to the accused concerned for the criminal's comment or to initiate proceedings directly against the accused for prosecution.

7) Whether there is any provision existed in the code of criminal procedure or the other allied laws that in case of non co-operation by an accused/ criminal with the police or other punishing authority, would he/ she be escaped from facing the prosecution.

8) Reason for recommendation of departmental action from CBI against the accused instead of prosecuting him in the court of law in a complaint which was criminal in nature and covered the ambit of CrPC/IPC. The same complaint was being investigated and substantiated by the ACB and it was beyond the ambit of CCS(CCA) rules, 1965. Number of criminal cases in which the ACB/ CBI had recommended departmental action by overriding the IPC/CrPC.

9) Details of source of Mr Semwal ability for purchasing and pocketing the law enforcing agencies like ACB/ Dte. Of Vigilance.

10) Name and designation of the persons who were equally involved with Mr SK Semwal's gang with reason for patronizing the criminal from facing the ire of law.

11) Reason for providing a special and out of turn treatment to Mr SK Semwal who had been declared a terrorist. Whether the public exchequer are meant to patronize the terror or to bring up a terrorist. Whether there is any law which has conferred any such power to the law enforcing agencies.

12) Whether the criminal justice system of the country has given any power to the Dte. Of Vigilance/ ACB and the CBI to ignore such type of crime even after their conferment.

13) Whether the Dte. Of Vig./ACB and also CBI were reluctant to take action against Mr Semwal due to his terror.

14) Whether the Dte. Of Vigilance/ AC & CBI would accept the challenge of Mr. Semawal by giving a fit lawful reply to him. Whether the ACB and CBI will remove the stigma slapped by Mr Semwal in the face of criminal justice system.

15) Whether the financial irregularities made by Mr Semwal will be reported to the EOW of Delhi Police. Whether these mischief makers who are serving with the help of fake, fabricated false certificates will be terminated from the service and prosecuted in the court of law.

16) Whether the CAG was aware of the fact of open loot of public money by the said terror designated Mr SK Semwal. Whether it was lawful and constitutional to bring up and patronizing the terrorist from the public exchequer.

17) The Appellant enclosed minutes of the then Addl. Secy., ALC consisting 5 pages.

18) Whether the CAG would order an special audit in respect of the fund given by the Govt. in aid and other heads of Account to the Delhi Sanskrit Academy in which the Mr Semwal was Secretary and now Vice Chairman.

19) Whether the CVC were aware of the facts about the financial irregularities committed by Mr Semwal. If yes then details of action taken against Mr Semawal. Whether the CVC had sent any advice suggesting action against Mr Semwal.

20) Whether the CVC would direct the police administration (including CBI and ACB, Delhi Police) to initiate criminal cases against the person who is still in service in Delhi Sanskrit Academy and its affiliated school/colleges by dint of fake and forge certificate issued by Mr Semwal and others as mentioned in enquiry report of 46 pages which was conducted by the ACB at the behest of CBI.

 

Four different PIOs replied to the RTI application. The CPIO and deputy accountant general (Admin) vide his letter dated 12 October 2009 replied in respect of query no 16, 17 and 18. The CPIO (ACL) vide his letter dated 31 August 2009 replied in respect of all queries.
 

The PIO and ACP of Anti-Corruption Branch vide his letter dated 25 August 2009 replied to all queries while the PIO and asst director (vigilance) vide his letter dated 4 September 2009 replied in respect of query no 2, 11, 12, 13 and 14.

 

However, Dharam Raj, citing incomplete information provided by the PIOs,   files his first appeals with respective authorities. The First Appellate Authority (FAA) and special executive, in his order, concurred with the reply given by the PIO and further disposed off the appeal observing that the Appellant could not state any reason for his dissatisfaction with the reply of the PIO.

 

The FAA and deputy commissioner of Police, ACB, in his order dated 6 October 2009 concurred with the reply of the PIO and further stated that there was no malafide intention on the part of PIO to hide any information sought by the Appellant.

 

The FAA and Joint Secretary (Vigilance) in his order dated 6 November 2009 stated that after the discussion, the Appellant was satisfied with the reply of the PIO.

 

Due to incomplete information received from the PIO, Dharam Raj, then approached the CIC with his second appeal.

 

During the hearing, he stated that he had sought information regarding a complaint filed with the ACB on embezzlement of funds in 1996. After four years, the ACB sent a report to Directorate of Vigilance (DoV), GNCTD. The inquiry report had been prepared on 30 July 1999 and was sent to DoV on 6 October 2000, he said.

 

"After that this report has been slowly moved over a period of years to the Art Culture and Language Department for taking actions. The Art Culture and Language Department will probably take some decades to decide the matter. If there is no substance in the allegation perhaps, an honest man is being vilified. And if there has been an actual embezzlement of public funds the various departments by their well-rehearsed slow dance movements are effectively colluding in ensuring that no action has been taken against the guilty," Dharam Raj stated.

 

Mr Gandhi, the then CIC, said that "...from the information before the Commission it is evident that ACB itself fist took three years to conduct the inquiries and then kept the report for over a year before forwarding it to the Vigilance Department. From information provided to the appellant by the PIO of Vigilance Department it appears that the Vigilance Department send the report to the Principle Secretary, Art Culture and Language Dept on 10 January 2001".

 

While allowing the appeal, the Commission, directed the PIO of ACB to provide copy of the complete inquiry report to Dharam Raj before 20 April 2010. The CIC also directed the PIO of Art, Culture and Language department to inform and send a copy of the vigilance report and all correspondence and file notings in this matter.

 

Mr Gandhi, before parting with the matter said, "...the Commission expresses its distress at the extraordinary slow methods in which inquiries are conducted and inaction becomes the primary characteristic of such events."

 

CENTRAL INFORMATION COMMISSION

 

Decision No. CIC/SG/A/2010/000527/7439

http://www.rti.india.gov.in/cic_decisions/SG-09042010-17.pdf

Appeal No. CIC/SG/A/2010/000527

 

Appellant                                            : Dharam Raj

                                                            New Delhi 110043.

 

Respondent 1                                     : Shakuntla Joshi

                                                            PIO & Dy. Secretary

                                                            Art Culture and Language

                                                            Govt. of NCT of Delhi

                                                            7th Level, C-Wing, Delhi Sect.,

                                                            IP Estate, New Delhi 110002

 

Respondent 2                                    : Hira Lal

                                                            Public Information Officer &

                                                            Asst. Commissioner of Police

                                                            Anti-Corruption Branch,

                                                            Directorate of Vigilance,

                                                            Govt. of NCT of Delhi

                                                            Room No. 178-184, Old Sect.,

                                                           Delhi.

 

To read other entries of the RTI Judgement Series on Moneylife, please click here

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