Why mediclaim portability will not work soon

While the principle of portability will definitely help policyholders, a number of issues need to be sorted out before it can see the light of day

Mediclaim portability, under which one can carry over one's 'no-claims' or 'low-claims' medical insurance record to any other provider, is not allowed currently. The issue surfaced once again after Insurance Regulatory and Development Authority (IRDA) chairman J Hari Narayan mentioned about the need for it yesterday at an insurance summit. However, according to industry experts, mediclaim portability will remain a distant dream, for a variety of reasons.

According to Dr Damien Marmion, chief executive, Max Bupa, the only way for portability to work is to have products with the same terms and conditions which also include a no-waiting period for pre-existing conditions. Besides, he feels that to deal with numerous complaints about health insurance, IRDA is thinking about portability as a quick-fix solution. "Instead of attacking the cause of the problem, IRDA is interested in addressing the symptoms," Dr Marmion said.

The CEO of Max Bupa also questioned how any insurance company with the current product portfolio could accept risk of policyholders switching from another company after paying premiums over the years and switching to a new insurer with no waiting period before raising claims. Moreover, the benefits from an insurer like Max Bupa can be more comprehensive than other company for the same sum assured, Dr Marmion told the media at the launch of its new product 'Family First Health Insurance Plan'.

Earlier, speaking at a CII insurance summit, Mr Narayan said, "It is high time that the insurance industry also moves to offer portability so that the mediclaim and motor insurance policyholders can switch their service providers. We have initiated a debate on the idea of portability and we would be arriving at a conclusion very soon."

Mediclaim portability is a great initiative for policyholders, but the ground reality will be complicated for its implementation. One major concern about mediclaim portability is its impact on increasing losses for insurers. Moneylife had reported about mediclaim portability and its issues in its 'Insurance Trends' column. (Please see:

Segar Sampathkumar, deputy general manager, New India Assurance Co Ltd, said, "In order to have portability, products by different insurers have to be aligned. There is already an initiative to have a common product which could then be portable across companies. Portability is indeed needed, so that a customer, especially at an older age, is not stuck with the present insurer, even if the service is not agreeable. But at the same time, we have to ensure that sufficient safeguards are instituted in the model so that no insurer could deliberately drive away elder persons out of his books. I am sure these issues would be addressed and resolved in the near future."

Only time will tell whether mediclaim portability is implemented or remains just a wish, like mobile-telephony portability, which was actually far simpler to implement and yet has not been done so far.



Deepak Khemani

7 years ago

For those who do not know mediclaim portability does exist among the PSU insurers, If you have a mediclaim policy with say New India Assurance and next year you want to switch over to say National Insurance and you have had no claim in that particular year then it is allowed, the companies are accepting the switchover request along with transfer of no claim bonus



In Reply to Deepak Khemani 7 years ago

Choice of insurers in the present state of governance , is like a choosing between a rock and a hard place.It is a non issue for which the Regulatory regime might not exercise needlessly.


7 years ago

With the present conditions, the portability is like a day dream or can be compared to be completely abolishing the corruption in the entire world. there are many things to be considered such as the product features and the premium, risk coverage apart from these the hospitals which has draculla kind of nature in squeezing the money from the insurers or from the clients. all these are to be aligned to one plot form.
Instead of thinking, planning about these things, the time and investment can be still invested in bringing awareness of Health insurance from the core level of the public by making more awareness programs, showing clippings in movies as the movies are the powerful media to reach the public. If the survey says that 60% of the Population is health insured, then IRDA can think of implementing these kind of activities. Otherwise it is waste of time, money and creating distrubance in between insurers and public as per my openion

samar mahapatra

7 years ago

Portability is not a core issue in health insurance that is caught up in the cross fire between hospitals and Insurers for cashless access.,and sidelined by the Insurance Regulator.

Mahindra Satyam reports Rs125 crore loss for 2009-10

Hyderabad: Mahindra Satyam (formerly Satyam Computer Services) today reported a consolidated loss of Rs124.60 crore for the year ended March 2010.

The company's net sales stood at Rs5,481 crore for the same period, Mahindra Satyam said.

This is the first audited financial results from the company after its founder and former chairman of Satyam Computer B Ramalinga Raju admitted to multi-crore accounting fraud in January last year.

Tech Mahindra took over reins of the company in April 2009 after the government-appointed panel cleared sale. It later rebranded fraud-hit company as Mahindra Satyam.

The Company Law Board had given exemption to Mahindra Satyam from publishing results for two financial years FY 2009 and FY 2010.


SBI to review deposit rates soon: Bhatt

New Delhi: State Bank of India (SBI), the country's largest lender, today said it would soon take a call on raising deposit rates, a move in line with the Reserve Bank of India's (RBI) observation that lenders should attract depositors as they have various other options to park money, reports PTI.

"Soon," SBI chairman O P Bhatt said when asked how soon it would take a call on revising deposit rates.

The bank is also supposed to review base rate, the minimum lending rate below which bank cannot offer loans.

Currently, the base rate of the country's largest lender is pegged at 7.5%. In order to bring in more transparency, base rate was introduced as replacement for Benchmark Prime Lending Rate (BPLR) from 1 July 2010.

RBI in its first mid-quarterly review earlier this month had said, "One important consequence of negative real rates is that banks have seen a deceleration of deposit growth, as savers look for higher returns elsewhere. If bank credit is not to become a constraint to growth, real rates need to move in the direction of encouraging bank deposits."

One year fixed deposit earns about 7% while annual inflation for the month of August stood at 8.5%. So, depositors are getting a negative return of 1.5% or more on their fixed deposits.

Deposit growth on annual basis is 14.5% much lower than RBI's projection of 18%.

Last month SBI raised its benchmark lending rate by 50 basis points and deposit rates by up to 150 basis points.

While the increase in the benchmark prime lending rate to 12.25% made existing home, auto and corporate loans from the country's biggest lender dearer, the hike in deposit rates ensured better returns for deposit-holders.

SBI increased the interest rate by 150 basis points (1.5%) to 4% for term deposits of 15-45 days tenor. The deposit rate increase was the maximum in this slab.

For fixed deposits with a tenor between 181 days and less than one year, the new interest rate was 6% against 5.25%, while 555-day fixed deposits invited an interest rate of 7.25%.

The interest rate on term deposits of between three to five years' tenor went go up by 75 basis points to 7.25%, while interest on the 5-8 years' maturity slab increased by 25 bps to 7.50%.


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