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
In the US, one out of every three or four young children are now obese, and generals from the Armed Forces have represented that stricter controls need to be exercised over packaged foods of this sort. Here in India, we have the world’s largest population of diabetics, and much of it is caused by unhealthy eating
Somewhere in the hubris surrounding the Kaun Banega Crorepati (KBC) circus, is a small sub-episode, played out for a short while onscreen—but extremely important all the same. It involves the handing over of a basket full of Cadbury products, important because it is not just one of the bigger sponsors, but also because at no stage does the venerable Amitabh Bachchan say anything about them being chocolates or even mentioning the brand.
This discretion is not accidental. Nor does it happen because the advertiser wants less airtime for her buck. The real reason is not shrouded in mystery but like a bad smell it is simply ignored.
Before one moves in-depth into the local Indian scenario with branded ‘chocolates’, it is important to point out that information from the ministry of food processing is still not very clear on the subject. Whether it has to do with cacao, cocoa solids, cocoa butter or any other combination thereof, it appears that the term ‘chocolate’ can be added on to almost anything sold in India, from slabs to bars to barfees to ice-creams and more, without demur—as long as the ingredients mention something to do with some form of cocoa. Sometimes, not even that.
Of course, in another conversation held “off the record”, this correspondent was told by a senior functionary at the Food Safety and Standards Authority of India (FSSAI) that often they follow the US FDA” classifications and standards. That is interesting, because much of the cocoa solids and cocoa butter controversy, in addition to the concept of changing the nomenclature of chemically altered palm oil to give it cocoa butter nomenclature and formulations as well as similarities, started there.
Chatting, separately, with a friend who works on vegetable oil carriers, a specialised sort of sea-going tanker ship which is designed to transport food-grade liquids in bulk across great distances and varying climatic conditions without damaging them, I also came to learn about a palm oil-based product which was now transported in bulk and is being used in lieu of cocoa butter—the main ingredient for most brands of chocolates and chocolate derivatives sold commercially. This sounded interesting—was the ship, then, always afloat in the brilliant aroma of fresh chocolate, certainly something which would match the fresh sea air?
Far from it, I was told—matter of fact, when moving into hotter areas like the Red Sea, the whole ship apparently smelt like cooking oil going bad on a roadside vendors stall off any random highway frying pakodas. Even the heavy oil and diesel fumes were less sickening, as the jokes flowed, after all—add liquor to the stuff in the tanks, and you have a Tia Maria? Food for thought, as we opted for the pink coloured stuff hopefully labelled ‘strawberry’, on the dessert rack.
On the way back home I stopped over at one of those 24x7 convenience stores attached to fuel filling stations, and on a whim and a fancy, asked the attendant to give me a variety of chocolates in the sub-Rs30 range.
With a basket full of ‘chocolates’ from Cadbury's, Nestle, Mars and a couple of other brands, I moved to the check-out counter and re-confirmed from the cashier—these are all chocolates, right? The young man behind the till looked up at me in surprise, then in wonder, and finally took pity and said, ‘of course’—and then added, “Cadbury means chocolate, no?”
How interesting. A story or report is developing, is the thought that went uppermost in my mind as I paid the sizeable bill, there was so much variety. Chocolates are Cadbury, generic, and other brands with similar products in the same shelf are also, thus, chocolates. When I asked the young man why they didn’t have Amul, however, I was told, oh, that’s milk, not chocolate.
But then, Cadbury’s is almost a generic term for chocolates, and asking the sales person at a store for guidance on this is not of much use—anything and everything in the same shelves is, by default, also allegedly chocolate. Somebody will say—the sales person is really not the best person to ask for specific details. Valid point, but who else will you ask at a sales outlet, then? And doesn't that mean something—slightly more lucid labelling, for example?
So now we start with the research part. The retail part has already confused many.
First road-block—you have to buy the stuff. Their websites, full of so much effort and detail for everything else, do not provide full details of what their products are made of. But that’s for the India websites—head for the same product, same company, but European and American websites, and you can get more details than you can handle. Try it. So, take a digital photo of the ‘chocolate’ wrapper, and expand it so that you can read it.
Yes, certainly, the list of ingredients and other important information is provided on the packaging. In an extremely small font size, and with special care to the colours used—what looks like dark blue or black on a purple background, for example. Or golden brown on darker brown... Which makes it almost impossible to read on the packaging, unless you go seeking out magnifying glasses and bright lights—or digitally enhance things.
In some developed countries, it is now a pre-requisite that what is not chocolate is not sold as chocolate. By and large, local variations aside, if it did not have at least 30% by way of cacao, chocolate, cocoa butter or solids, then it could not be called ‘chocolate’. Certain products, like ice-creams claiming to be chocolate or using related words, needed to have a “this is not chocolate” cautionary on the wrappers too.
Next, we start with those popular products which don’t have aspirations towards being called ‘chocolates’, but won’t hesitate in giving themselves airs as well as using confusing buzzwords. Cadbury Oreo, for example, uses the term ‘chocolatey’. What does that mean? If you look closely at the wrapper, you will see that it means that the ‘creme’ part contains refined sugar, vegetable fat and emulsifier. The ‘biscuit’ part, however, does claim to have some cocoa solids—though not enough for even the manufacturers to tell us how much.
Moving on, we take a closer look at the flagship brand from Cadbury, called ‘Dairy Milk’. Gets interesting, because the Rs5 and Rs10 packets containing slabs or éclairs don’t even claim to be chocolates, or have any in them. These are, simply, refined sugar in vegetable fat. But the packaging, font, colours used—even the glasses of white liquid shown that could be milk being poured into the ‘I’ are the same—as with the costlier ‘Dairy Milk’ bar which cost Rs25-Rs30 and more—and have “rich classic milk chocolate” written on them.
Coming up next is something called Galaxy Smooth Milk, manufactured in Dubai, exported and imported by Mars in India—and over-printed with the line “smooth and creamy milk chocolate”, as well as with a strategically placed sticker placed over the ingredients part. This sticker says “no vegetable fat in chocolate”, but when you peel the sticker away carefully, you learn that the non-chocolate part of this product does contain—vegetable oils.
Nestlé’s packaging appears to have their own strategies too. KitKat says that it has crisp wafer fingers covered with ‘chocolayer’. The milk chocolate bar says that they are Swiss chocolate makers since 1904, but the ingredients take you through the usual storyline of going coy about its ingredients—‘nature identical’. Best, of course, is their Milky Bar, sold in the same chocolate shelves—it gives up, doesn’t even claim to have any chocolate in it, and goes into partially hydrogenated vegetable oils. Of course, the fonts used and the labelling are deceptively similar to their chocolates, but then, that’s par for the course.
The ‘chewy’ chocolate bars, they have their own stories—5-Star by Cadbury is “yummy chocolaty”, Bar-One by Nestle is “delicious chocolayer” and Snickers by Mars is “covered in chocolate”. But all of them, without exception, have their share of vegetable fats and oils. Of course, that’s never part of the advertising or marketing strategy.
Because, simply put, it would not pay to tell buyers the truth. That what they are getting, largely, is chemically altered and modified vegetable oils—especially palm oils. For whatever reason, and one reason is that the process of converting palm oil into cocoa butter brings it very close to the next step where they all end up as industrial plastic sludge, even house flies and blue bottle flies don’t sit on these confectionary item when you unwrap them and put them out on a balcony,
So when and how did cocoa butter morph into something that came out of palm oil? Here’s one of the articles on the subject.
The chemically re-formulated palm oil is just one step away in the world of chemistry from being converted into a form of industrial plastic. Even in this shape, it has many shared properties, for example—flies and other insects won't come near it.
Try it. Get hold of an imported packet of chocolates, sold in Europe or North America. Unwrap them, and put them out on a balcony in plates, along with other plates that have Indian ‘chocolates’ of the sort mentioned as well as cut fruit like bananas. And watch where the flies and other insects head for.
Why don’t the flies head for the Indian ‘chocolates’, the ones with palm oil cocoa butter in them?
If we had to eat sweetened vanaspati mixed with refined sugar, we didn’t need FDI from abroad to come and do it for us, and tell us it was chocolate. Even the worst of local sweet and sweetmeat manufacturers would never have sold us this sort of garbage.
Out there in the US, one out of every three or four young children are now obese, and generals from the Armed Forces have represented that stricter controls need to be exercised over packaged foods of this sort. Here in India, we have the world’s largest population of diabetics, and much of it is caused by unhealthy eating of this sort.
Is it too much to expect from these companies, with their ‘brand values’ and all the rest of it, to be honest about what they are selling?
No wonder Amitabh Bachchan just handed over the package full of Cadbury whatevers. He is now a grandfather, again, and is probably concerned about what that child will eat when she grows up. Certainly not refined sugar in vanaspati.
SFS Commercial Finance has also obtained a non-banking financial company license from the Reserve Bank of India
Siemens AG, a global powerhouse in electronics and electrical engineering, operating in the industry, energy and healthcare sectors, said it will invest $50 million in Siemens Financial Services for commercial operations in India.
"Siemens Financial Services (SFS) is rolling out its range of commercial finance solutions to help business and public sector customers in India to invest efficiently, and to maximise growth opportunities in a rapidly developing economy," Siemens Financial Services GmbH chief executive Roland Chalons-Browne said.
We will invest $50 million for setting up Siemens Financial Services, Chalons-Browne said, adding the expansion of its presence in the Indian markets represents a significant milestone for SFS.
SFS Commercial Finance has also obtained a non-banking financial company license from the Reserve Bank of India, its chief executive Sunil Kapoor said.
Siemens research forecast says that capital expenditure in the key Indian markets will be very strong between now and 2020, with the healthcare sector investing over Euro 200 billion (Rs13.2 trillion) industry sector more than Euro 125 billion (Rs8.25 trillion) and utilities sector over Euro 800 billion (Rs52.8 trillion).