Stocks
Share prices bounce: Wednesday Closing Report

We may see one or two days of recovery if today’s lows hold

Today, after the market opened in the negative, the indices witnessed range-bound movement until noon. There was steep decline, resulting in the benchmarks hitting their intraday lows, the lowest since early November 2009. The indices made a strong recovery from their day’s lows but closed in the red. From here we may see a short term recovery if today’s lows hold. The National Stock Exchange (NSE) saw a volume of 67.14 crore shares.   

The market opened lower today, wiping all the gains that were accrued yesterday in come-back rally, on negative cues. Uncertainty in Europe and a lower-than-expected US GDP growth in the September quarter pulled down the Asian pack, and India was no exception. The Nifty opened at 4,780, down 32 points from its previous close, and the Sensex declined 95 to begin trade at 15,970. The opening figures on both benchmarks were also their intraday highs.

All sectoral gauges were in the red as the fall increased as trade progressed. Metal, tech and banking counters witnessed heavy selling in early trade. Reports of China’s November factory output plunging to a 32-month low also weighed on investor sentiments.

Finance minister Pranab Mukherjee, while responding to queries in Parliament today, attributed the stock market crash to withdrawal of funds by foreign investors and depreciation of the rupee.

The market touched the day’s low in noon trade as the European markets opened lower. At the intraday low, the Nifty fell by 171 points to 4,641 and the Sensex plunged 587 points to 15,479.

The advance-decline ratio on the NSE was 357:1342.

Among the broader indices, the BSE Mid-cap index declined 2.05% and the BSE Small-cap index fell by 1.72%.

Barring the BSE Consumer Durables index (up 0.49%), all other sectoral gauges closed lower. The top losers were BSE Capital Goods (down 3.04%); BSE TECk (down 2.65%); BSE IT (down 2.48%); BSE Oil & Gas (down 2.41%) and BSE Bankex (down .40%).

NTPC (up 0.58%) was the sole gainer on the Sensex in today’s market mayhem. The laggards were led by Jaiprakash Associates (down 5.05%); HDFC Bank (down 3.85%); Bharti Airtel (down 3.70%); BHEL (down 3.58%) and Wipro (down 3.17%).

NTPC (up 1%); Reliance Communications (up 0.71%); Bajaj Auto (up 0.43%) and Hindustan Unilever (up 0.03%) were the gainers on the Nifty. BPCL (down 5.34%); JP Associates (down 5.13%): HDFC Bank (down 4.52%); IDFC (down 4.36%) and Ranbaxy (down 4.21%) were the major losers on the index.

The absence of any positive trigger kept the indices range-bound in the negative terrain in the post-noon session. The Nifty declined 106 points to 4,706 and the Sensex closed the session at 45,700, a cut of 365 points.

Markets in Asia closed lower on news that China’s factory output in November plunged to a 32-month low of 48, down from a final reading of 51 in October. This apart, the decline in US GDP growth in the September quarter re-ignited fresh concerns about the slowdown in the global economy.

The Shanghai Composite declined 0.73%; the Hang Seng tanked 2.12%; the Jakarta Composite fell 1.30%; the KLSE Composite slipped 0.34%; the Straits Times decreased by 1.50%; the Seoul Composite settled 2.36% and the Taiwan Weighted tumbled 2.77%.

Back home, foreign institutional investors were net sellers of stock totalling Rs952.68 crore on Tuesday. On the other hand, domestic institutional investors were net buyers of shares worth Rs1,065.51 crore.

Suzlon Energy subsidiary REpower Systems SE has inked a deal with EverPower Wind Holdings to deliver 68 wind turbines for the Twin Ridges project in Pennsylvania, USA. The wind farm, which is scheduled for commissioning in the fiscal 12-13, will generate total output of nearly 140 MW, providing enough clean energy to power over 38,000 homes. The scrip rose 0.23% to close trade at Rs22.10 on the NSE.

Heavy vehicles major Ashok Leyland and US-based agriculture machinery maker John Deere have announced entry into the Indian construction equipment business with the launch of 435 Backhoe Loader. The earth mover is the first out of the 50:50 joint venture between the two companies, almost three years after they forged the partnership. Ashok Leyland settled flat at Rs24.85 on the NSE today.

3i Infotech has entered into strategic alliance with the Indian arm of Smartesting, a leading software provider for model-based test design solutions. With this partnership, 3i Infotech’s Independent Testing and Compliance Business (ITCB) will not only integrate the Smartesting solution in its test environment but also offer this as part of its testing solution to all its customers. The stock tumbled 5.29% to close at Rs17.90 on the NSE.

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HDFC Bank chooses Experian National Hunter to tackle loan application frauds

Experian’s Hunter service enables the early detection of potentially fraudulent applications and helps identify fraud rings

Experian, the global information services company, today announced that HDFC Bank has selected Experian National Hunter, an application fraud prevention service to prevent costly application frauds. Now, India’s three private sector banks which include Axis Bank and ICICI Bank are all using Experian Hunter to prevent loan application frauds.

Experian’s Hunter service enables the early detection of potentially fraudulent applications and helps identify fraud rings. The most effective strategy is to prevent the fraud at the point of application and Hunter achieves this without affecting customer service levels and turnaround times.

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United India continues to reject insurance claims

Its business as usual even after two months of the IRDA circular which asked insurers to not reject claims on technical grounds. With no warning or penalty for specific insurers, will the IRDA circular be taken seriously? 

Two months ago the Insurance Regulatory and Development Authority (IRDA) issued a circular to life and non-life companies asking them not to reject claims on technical grounds like a delay in filing. Some insurers including United India Insurance were rejecting claims mechanically based on delay in hospitalisation intimation and claims filing. Claims continue to get rejected even after IRDA circular.

For starters, there is no warning or penalty for insurance company to reject claims mechanically on grounds of late filing. The IRDA circular is not an ‘order’ directing any particular insurance company to strictly adhere to the claims rejection on technical grounds. By not naming the errant insurers, the companies can feign ignorance of the snag happening under their nose.

According to industry sources, “The end result is that there is no directive given by insurers like United India to its regional/division offices or third-party administrators (TPA) to take necessary remedial action. There is no change at the ground level which makes the IRDA circular completely ineffective.”
Another source confirms that there is no relaxation on the strict deadlines and condone requests will be rejected in most cases.

United India has strict deadline of hospitalisation intimation within 24 hours and claims submission with seven days of hospital discharge. Minor delay results in claims rejection and condone request is usually refused. Moneylife has examples of some claims rejection even when the strict deadlines were met. Moneylife has done cover story (3 November 2011) on ‘Insurance Claim Rejected’

Interestingly, United India is the only government-owned general insurer which has shown profits and has aggressive plans for business growth. The company’s CMD was quoted saying they have premium target of Rs8,000 crore this year at 25% growth rate in business. They plan to bring down underwriting losses—premium less claims outgo—to Rs900 crore from last year’s figure of Rs1,760 crore. He adds, “Better underwriting, proper pricing of group policies, tightening of claims procedures in respect of health insurance and audit of claims settling agents resulted in reduction in health claims outgo.” The ‘tightening of claims procedure’ surely includes claims mechanically rejected on flimsy grounds of any minor delay (or no delay in some cases) in hospitalisation intimation or claims submission. It did not matter that the company happily collected premiums from same customer for decades.

According to one Moneylife reader, “United India has instructed its offices to send soft data, to the TPAs, of health insurance renewals once a month only, usually on the last day of the month. As a result when an insured is admitted to a hospital a week or two after his policy has been renewed and he contacts the TPA, he is told that as per their records his policy has not been renewed and therefore they are unable to register his claim even though he had called them within the mandatory 24-hour deadline! As a result he is also denied cashless facility and has to go in for reimbursement which again will be denied on the grounds that the claim was not reported within 24 hours!”

He adds, “Another ploy being perpetrated on the policy holders is the raising of queries pertaining to the claim by the TPA wherein it is stated that if the insured does not respond within 15 days the file will be closed. This communication in most cases is not posted to the policy holder whereas a copy of the same is kept in the insured claim file. In cases where it has been despatched the letter usually arrives just a day or two before the deadline giving the insured no chance to reply in time. Once the file has been closed, only a letter from the regional manager will be accepted to reopen the file. The branch (division) mangers have no say on this issue! But if an insured has the tenacity to fight his claim will no doubt be settled. United India is fully aware that a lot of policy holders will not go that far and will simply bemoan their fate and this is United India's way of trying to keep claim ratios within tolerable limits! Policyholders are warned!”

There is no initiative from IRDA to monitor the ground reality of mechanical claims rejection. Will IRDA get the statistics on claims rejection and reasons given by insured for delay? Will it do an analysis on how many requests to condone delay were approved and rejected? Does IRDA intend that insurer follow its advice from the date of circular? What about the claims which are already rejected and condone requested? What about claims which are already rejected, condone rejected and cases closed? The mechanical rejection has been going for long time and the relief has to be applicable for past cases, too. Will IRDA review such cases and give justice?

IRDA needs to check if the insurance company and TPA have a 24X7 system in place to receive intimation and give confirmation number. They should insist on such system being 24X7 customer care and not force the insured to send fax or email within 24 hours of hospitalization. Fax and email for hospitalisation intimation are disputed as being not received or not legible. It is a perfect excuse for claims rejection.

Also read, IRDA asks insurers not to reject health insurance on a routine basis, but don’t pin much hope on this directive

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COMMENTS

Tias Chakraborty

6 years ago

It is sad that the IRDA is not imposing stricter laws against claim rejection by the private insurers. Some of the private players have claim settlement ratios as low as 30% and yet they continue to advertise in a major way. The public is completely kept in the dark and once the claims are registered, these companies do not make any communication. The IRDA needs to take immediate steps to enhance transparency in the private insurance sector.

R Nandy

6 years ago

Buying insurance in India is some kind of a donation.It is extremely difficult to get the claims. Ironically most of the insurers in the health account are in losses according to IRDA figures.My parents have United India and thankfully their hospitalizations were planned and was with the help of their agent,so there were no problems in getting the claims.But,I have the suspicion and evidence that private insurers are even worse in this
regard. A colleague had her mother hospitalized. She had a private health cover from Royal Sundaram. But, Royal Sundaram rejected the claim on technical grounds. Thankfully my friends company Group health insurance covered parents and he got the claims settled through the group cover. The private insurers are careful not to reject group covers on frivolous grounds due to the fear of loosing a large account,but private individuals
are at their mercy.

I had a travel insurance from Bajaj Allianz.I had some stuff missing from my baggage enroute. The losses were nominal below Rs5000.I had made a complain to them for a claim. They didn’t even bother to follow up. I also left the matter as it was not worth my time. Interestingly Bajaj Allianz sells one of the cheapest Car insurance.
Going through their reviews I felt they should be called Bajaj Allianz
Charitable Foundation instead of Insurance as most of the premium paid is a donation without any chance of getting claims.

Insurers crib that Indians are under-insured, but the fact is that
India is a unregulated jungle in which most social contracts are breached.

arun adalja

6 years ago

insurance companies wants to make money only and for simple reasons they reject the claims and premium is always increase when you go for renewal i had taken overseas medical insurance for 6 months from new india and i had extended for another 6 months and they charged 50% extra premum for extended period i am not able to understand the logic even irda did not responded for the same.

Deepika Mahtre

6 years ago

If the message has reached IRDA Chairman he should pull up Managing Director of United India Insurance Co. Openly annonce in the media action taken by IRDA. Give directive to all insurance Companies and Insurance Ombudsman to immediately settle all the claims not paid for delay in intimating the claim and also submission of claim. Many claims are made non payable even when the person has sent claim intimation within 24 hrs and submitted the claim within 7 days. How many complaints must have gathered in Insurance Ombudsman office IRDA should find out and ask Ombudsman to issue order to pay. What happens to those who do not know how to go about is a Profit to United India Insurance Co which the Managing Director is aiming to achieve.

Nagesh Kini FCA

6 years ago

Enough is enough, let us accept that IRDA is a toothless tiger, not a regulatory watch dog that can neither growl nor bite.
It is sheerly impossible to reach the TPAs within 24 hours and this is held against the insured.
It needs to be legally examined whether the wanton claim rejection can be tagged on to the Cashless PILs pending in Delhi and Bombay HCs. Or less United India and IRDA need to be hauled up by a PIL.
Concurrently complaints need to be filed with the Insurance Ombudsman in all the state capitals by the affected individuals. Consumer Disputes Redressal Fora are a long way.

REPLY

SAMAR

In Reply to Nagesh Kini FCA 6 years ago

We whole heatedly agree with you, for a settlement per PIL, in all such service gaps felt by policy holders, .but unfortunately , both at Delhi/Mumbai HC, final outcome is waiting , for nearly a year , after IRDA filed their reply.Some interested parties might nudge the competent legal Bench, to please conclude the hearing.What else the Aaam Admi do?

nagesh kini

In Reply to SAMAR 6 years ago

Approach Adv. Shanti and Prashant Bhusan for pro bono or Justice Santosh Hegde or if it fails go to the final Annaji!

vinit

6 years ago

Will the insurance co. pay back the premium if there is delay in service on their part.They are not responsible and accountable for their faults and misdeeds. It is policyholders on whose shoulders everything is shifted. Let there be STATUTORY CITIZEN CHARTER for insurance cos. also so that they can also be penalised for deficiencies in services

SAMAR

6 years ago

Why not call for a face to programme , with UI policy holders /and experts in Insurance, to do away with misunderstandings and transparently explain , why of their grievances, vis a vis the insurance contract & help contain medical malpractices.

REPLY

Hemant

In Reply to SAMAR 6 years ago

need meeting with UI officials, not experts in insurance. please take initiative and arrange for it. i will get UI policyholders.

Mario Domnic

6 years ago

With so many complaints against United India Insurance Co. Ltd. why is regulatory authority not taking any action with the company Managing Director for ignoring the directive given. Do the insured person have to go pleading to the Division Office. Many are aged they do not even know how to go about getting their claim settled. Agents can be of help to some extent. It may not be in all Division Office but in some office of United India Insurance Co. Ltd. there must be a tie of the managers with the agent or not, it is in a way a sure sign of encouraging corruption under the table to extract money from the insured person. Many may be willing to give bribe wanting to get some money of their rightful claim, as they know the trend of corrupt officers working in PSU in India .

Samar

6 years ago

MEDICLAIM is a retail hospital expenses reimbursement retail product, with all the hassles associated with its sales & servicing.Health insurance is a niche market, unlike motor/property insurance.The PSU general insurance Cos are ill equipped for the task, considering disorderly medical providers.They have no option to put all possible checks & balances , under the contract to save their bottom line.

REPLY

Hemant

In Reply to Samar 6 years ago

It's not checks and balances. It is finding creative ways to ensure customer is not able to give intimation within 24 hours. Does United India or TPAs offer 24 hour customer care and give confirmation number when customer calls within 24 hours of hospitalisation. NO. What do disorderly medical provider have to do with insurance contract between customer and insurer? Let the CMD not boast of increasing premium collection and rejecting genuine claims at the same time. It is called cheating.

Samar

In Reply to Hemant 6 years ago

If contract of good faith is broken more often than as exception, the spirit of trust is defeated, & the Insurers clamp down non negotiable terms, unfortunately .There are instances of elements, who make it a habit of seeking loopholes to enforce their rights.So, insurers also must protect their bottom line , citing small prints.Insurance is not an unconditional contract. Lately, they are under obligation to enforce their part of the contract, thanks to CAG strictures.When insurers are regulated , why not Hospitals/Doctors.?

Hemant

In Reply to Samar 6 years ago

it is not fine print, but bold, daylight robbery. intimation within 24 hours also leads to rejection in some cases under garb of not receiving fax/email by TPA. Is it difficult to setup 24 hours customer care by UI or TPA? If so, don't impose clause of initimation within 24 hours. Also, the email 'read receipt' by TPA in most cases is after 4-5 days. it means the TPA do not even see it for long time. How many instances of UI checking with hospital to verify? close to zero, so why do they need intimation within 24 hours? just to harrass & reject claim

dinesh

6 years ago

Insurance companies are interested in collecting premium only. When it comes to paying claims, they take their own time. They look for excuses to delay/reject claims. Policies are not sent in time. Warranties and clauses are not attached.Their softwares do not tell about their faults but they become active in case of claims.

NIRMAL BHAUWALA

6 years ago

my client claim also rejected for late intimation.party admit 20 I GIVE INTIMATION 21 .TPA SAYS IN OUR NEW SOFTWARE TIME WILL CALCULATE FROM SHARP TIME OF ADMISSION.IWORKING 9 YEARS BUT THEY NOT INFORM LIKE THIS CHANGE.I REQUEST IRDA TO PENALTY IF CO.NOT SETTELED CLAIM WITH IN 7 DAYS.24% INT.ADD IN CLAIM AMOUNT. RULES NOT ONLY FOR CUSTOMER

Kapil Kekre

6 years ago

IRDA , or any other regulatory authorities are found in effective when it comes accountability by acompany towards clients. Private companies make use of their guide lines( rules) to get what they want and Public sector company point towards it as shackles for their inability to perform.

Nagesh Kini FCA

6 years ago

It's time that the in-house TPAs proposed by the 4 PSU Insurers start operating.
The TPA as a tribe are found to be a bane both for the insured and service providing hospitals in whose name they extract on account money from the companies and play around after parting with a small amount to the hospitals.
Some new insurers have rightly chosen to have in-house claims department.
In the last fiscal 2010, New India gave away Rs. 68 cr. to TPAs for causing more and more harassment!

REPLY

SK MAHAPATRA

In Reply to Nagesh Kini FCA 6 years ago

Nothing prevented PSU Companies, to retain their Claims Dept.Recently, they have aborted their joint venture TPA project.
Govt could help set up a specialist Health insurance, stand alone Co , so that niche issues troubling Aaam Admi, could possibly be addressed, backed by a regulation for accredited health delivery service provider.General Insurance Companies are not ideal vessel to market/service health insurance, if permitted to say so.

Harsh Shah

6 years ago

Very true to every word written by you. IRDA issues directives to Insurance Company. Comes into limelight by media. That’s it all. It makes one wonder what authority and powers IRDA has to ensure implementation of directives given to Insurance Company. IRDA must have received very many complaints of claims being rejected by United India Insurance Co. on mechanical ground. If so what action has IRDA taken at C.M.D. level? Is he being questioned? Or is he allowed to be supreme to continue the business of harassment to claimant. Lakhs of rupees worth of claims must not have been settled. To this C.M.D. with pride is all out to show more profit. There is no time bound for quick settlement of the claim makes Insurance Company play at the cost of Insured Person who is ultimately a suffer. Only alternative left for the claimant is to knock at the door of Insurance Ombudsman or Consumer court through the help of Self made Consultant, a lawyer or a good agent who can help to file a complaint.

dinesh

6 years ago

It is unfortunate that insurance cos reject claims on the ground of delay in intimation or filing of claims. When some accident or sudden illness occurs insured get handicapped and his near ones also do not have any idea about policy details.Further in such cases relatives get occupied in all the hassles.The things become more difficult when incident takes place out of home town . Insurance is a contract of utmost good faith and if the insurance cos. feel that their clients are cheaters then why be in the business. Better wind up and go home.

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