Thursday, March 29, 2012

Be careful -fake life insurance policies have been found

In a recent case case in New Delhi Delhi Police has arrested seven persons including:

1 Delhi university graduate.
2 employees of ICICI bank
1 LIC agent
+ 3 others

This group have been taking loans from banks by pledging forged LIC policies.

The mod us operandi of the gang was to procure blank LIC policies and after filling the same with fake details, submit it to the ICICI bank to procure loan. So far they had been able to procure loans worth Rs. 2.7 crore and had invested the money in shares and properties.

“the kingpin of the gang is one Ajit Pundhir ,who is a freelance agent for ICICI bank. He came in touch with Ram Niwas and Prem Prakash who used to work in the " Loan Against Securities Division of ICICI bank at Videocon Tower,New Delhi and were responsible for verifying original documents submitted to the bank of obtaining such loans”
The question before us is -Why ICICI Bank did not check the premium receipts for premium paid by the insured?

Monday, March 26, 2012

Documents needed for filing claim under 3rd party claim for accident to MACT

Following documents should accompany the petition for filing claim under 3rd party claim for accident to MACT:
1. Copy of the FIR registered in connection with said accident, if any.

2. Copy of the MLC/Post Mortem Report/Death Report as the case may be.

3. The documents of the identity of the claimants and of the deceased in a death case.

4. Original bills of expenses incurred on the treatment along with treatment record.

5. Documents of the educational qualifications of the deceased, if any.

6. Disability Certificate, if already obtained, in an injury case.

7. The proof of income of the deceased/injured.

8. Documents about the age of the victim.

9. The cover note of the third party insurance policy, if any.

10. An affidavit in support of the above documents and detailing the relationship of the claimants with the deceased.

You will find this list useful so that complete documents are lodged and claim / case is settled at the earliest.

Should Insurance Companies reward customers having good eating habits?,

Scientific studies reveal that there is a definite correlation to what we eat to our health conditions. Lot of research is going on and there have been many studies which have established this correlation. Recently, we have come across two different studies which have shown that the two most deadly diseases especially are related to the lifestyle and prove have definite correlation to what we eat.

Study 1 “Soft drinks raise heart attack risk”.

“Drinking one sugar laden soft drink every day dramatically raises the odds of having a heart attack” A study has confirmed. Diet varieties of Soft drinks /Cakes/ Ice-cream /or frozen yogurt (that use artificial sweeteners) got a clean bill of health. It is found out that a daily sugar sweetened drink raised risk of heart attack – including a deadly one – by 20%.

The study, reported in the journal “Circulation” also found that the more sugary drinks someone had, including still fruit squashes with added sugar, the chances of risk rose. Water, coffee and tea are the best drink choices, followed by low fat milk. Tea and coffee are okay too, but only if taken without sugar.

Study 2 “Regular & daily intake of large bowl of white rice increases chances of diabetes”

British Medical Journal has covered a study which was conducted over a period of 4 to 22 years. According to this “Eating one large bowl of white rice every day increases the risk of diabetes by 11%.”

A team of Harvard School of Public Health and Harvard Medical School who looked at 2 studies in Asians (Chinese and Japanese) and two in western populations found that every large bowl of white rice eaten a day is linked to an 11% increased risk.

As these studies are having large sample base and are conducted over long period we come to the conclusion that it is high time that the insurance companies in India will start rewarding people, who have healthy food habits. At the same time in comparison to this diet if the person consumes too much of sugar laden soft drink or is habitually a rice eater then premiums can be loaded.

We invite comments from you.

MACT approves claim of Rs. 43 Lakhs for death caused by 2 wheeler

We regularly hear about cases where large modern, expensive, high power cars and other heavy vehicles cause accidents due to rash and negligent driving. However, even a rashly driven two wheeler can cause loss to others. In a recent case the family members of the victim of a road mishap, involving a rashly-driven two wheeler; have been awarded a compensation of over Rs 43 lakhs by the Motor Accident Claims Tribunal (MACT).

Presiding Officer of (MACT) Sanjay Kumar Aggarwal directed United India Insurance Company Ltd, with which the offending two-wheeler was insured, to pay Rs 43,60,139 to the wife and children of Ravinder Singh, who had died in a road mishap is April,2011

"Reading all the documents filed by the petitioners (the victim's family) as a whole it is clear that the respondent (Aasar Kapoor) was driving the vehicle in a rash and negligent manner.

"I award Rs 43,60,139 as compensation with interest at the rate of 7.5 per cent per annum, in favour of the petitioners and against the respondents (Aasar Kapoor, Dalip Kapoor and insurance company) on account of their liability being joint and several," the tribunal said.

The accident took place on April 4 2011 when Aasar Kapoor hit Singh's motorcycle with his two-wheeler at a red light on Outer Ring Road near Keshopur, in New Delhi. Due to this Singh sustained grievous injuries and had died later in the hospital, his family said.

The tribunal awarded the compensation to the victim's wife and kids, after coming to the conclusion that Aasar was riding his motorcycle in a rash and negligent manner, on the basis of the documents filed.

This is a welcome step as the general impression in the society is that judicial process takes long or very long time.

What is appreciable in this case is that the case has been settled within a year.

Monday, March 19, 2012

25% people think insurance is not needed - Low insurance awareness even when 48 Insurance companies are operating in India

Insurance foundation of India has always maintained that penetration of insurance in India is very low because insurance has been limited to metro/ large cities. Lot of effort is needed to tell the masses about insurance and that too in the easy to understand language or should we say in Hindi & Vernacular languages. Insurance should be introduced as a subject in Schools /Colleges. What can you expect from those who have graduated in Hindi medium with History & Geography as subjects and are working as freelance agents of life insurance companies and are trying to sell ULIP product with English literature /proposal forms? It gives a good chance for mis-selling especially when the buyer also does not understand English language.

Even the survey conducted by IRDA has also revealed that 25% of people think that insurance is not needed. The primary reason is lack of awareness about insurance. What is more worrying is that people in the age group of 20-30 also lack the awareness given that in last 10-15 years internet and mass media has been very active in spreading awareness in various arenas. The insurance sector now has 48 companies operating and during last 12 years insurance industry has also grown, IRDA has also initiated various campaigns like BIMA BEMISAL.

Insurance awareness cannot grow unless it is taught at school and college levels. Some colleges offer the insurance courses but these colleges are concentrated in few big cities. The challenge is to take insurance education or financial literacy at grass root level. We feel there should be atleast 660 schools offering BBA (insurance management). This is 1 school per district.

Government wishes PSU banks going to exit from Insurance, which is a non core activity

Government wishes PSU banks going to exit from Insurance, which is a non core activity.
Everyone one wants to diversify when times are good but when the times are tough there is heat to squeeze. The banks have been asked by the government to get out of non core business such as Insurance. It could be a big blow to banks if this is implemented. Some of the banks would have to exit joint venture and industry would be seriously hampered, considering the agency model for insurance is under question due to high attrition and lack of professionalism.

As per the news published in Economic Times the Government’s pre-conditions for capital infusion stems from the concern that a number of non-core banking activities, particularly life and non-life insurance activities are capital guzzlers. Banks have to infuse capital for years in these ventures since it may take several years to break even. "The government is worried that demand for capital will rise every year if banks decide to undertake these activities. As an owner, they will then be obliged to infuse more capital to sustain the bank, something they would want to avoid when the fiscal deficit is out of control," said a senior bank official from public sector bank.

If this is indeed implemented then we as a country will need new non banking players to enter the insurance business In the recent past many business houses who entered got disheartened and have been in the mode to exit. Some of these are

• Bharti Axa : Bharti

• DLF Pramerica : DLF

• Future Generali : Future group

We wonder whether 49% FDI in insurance sector will make much impact.

Few days are left for making Significant Savings in Health Insurance Premium

On April 1, 2012 the service tax on health insurance premium would increase to 12.36% from the existing rate of 10.30%. It means that you have to pay a higher premium. For example if you pay a premium of Rs. 20,000/- for the health insurance premium, this is how you will be impacted:
Let us take elaborate this example. Total premium payable during this 2 years period is Rs 44,532 (Rs. 22060 + Rs. 22472) assuming that you decide to buy it before April 1, 2012.
It will be much better for you to go in for 2 years policy being offered by certain Insurance companies by giving discount of 7.5%.
From the above example you can see that you will be able to save Rs 3,721 on the 2nd year premium which is equal to 16.87% whereas banks FD for the same duration would not give you more than 6%-7% returns.

Friday, March 9, 2012

Health care costs will go on going up as the price of real estate goes up in New Delhi & other Metro cities

It is interesting to see ad of Delhi Development Authority (Government body controlling land in the capital city of India- Delhi/ New Delhi) which has advertised for plots for:
Nursing Homes

in different parts of Delhi state.
You can look at sr. no. 2 where reserve price for 6 Hectar plot is Rs.464 crores. Assuming 500 beds will be available in this hospital the fixed cost of land for every bed will be Rs.92 lakhs. To this you have to add the following costs.

Construction cost
Equipment cost
Manpower cost

You can well imagine what a patient will have to pay when he is admitted to this hospital in 2016 or 2017, when the hospital will be operational.

This leads us to conclusion that one must have Health Insurance policy to pay for those costs.

Take up your claim with Insurance Ombudsman- There are good chances of Success

Insurance Foundation of India has always stood by its members and helped them to get settlement of health insurance claims from insurance companies and their TPAs.

In a recent case one of our client’s claim was rejected by the Insurer on the ground that the insured was not required to be hospitalized for abdomen pain. Furthermore, they contested that the insured should not have ever gone to hospital for such pain. The claim amount for hospitalization was Rs 18,732/-.

We believe that treating doctor’s decision is important (also proved in this case). An insured person should not take any symptom related to his health lightly, however minor it may seem. In this case too, the insured followed the advice of the doctor and was hospitalized. In a recent case we have seen that a young man collapsed during the Gurgaon Marathon due to dehydration. Unfortunately, the young man died in a leading hospital in Delhi after being hospitalized for over 30 days due to complications caused as a result of dehydration.

We advised our client to take the next step as per the process i.e to approach the Insurance Ombudsman. We helped the client in presenting his case before the Ombudsman. The Insurance Ombudsman directed the Insurance Company to pay the claim amount along with interest @ 8% from the date of the claim. The Insurance Company has paid Rs. 18,958 along with the interest @ 8% i.e. Rs. 2,401 to our customer as directed by the Ombudsman.

The settlement of Rs. 18,958 has again highlighted the fact that persistence is the key. We have always maintained that if you are persistent and have professional guidance then the chances of your insurance claim being settled in your favour are more than 98%.

Wednesday, March 7, 2012

Have you faced inconvenience in using Health Insurance portability within the company and within the city?

We appreciate the concept of health insurance portability which was introduced by IRDA in October 2011. As a result a policy holder can shift from one insurance company to another insurance company within the city and within the country without losing the benefits accrued on the previous policy. Those who have shifted their policy in recent months are having a feeling of satisfaction. Compliments to IRDA the regulator on empowering the customer. However, in case of public sector companies such as National Insurance Company Ltd, The New India Assurance Co. Ltd, The Oriental Insurance Co. Ltd and The United India Insurance Co.Ltd. it is a practice that different branches of same insurance company have different TPAs even within the same city. As a result of that if the customer wants to shift from one branch to another branch even within the same city then hassles are being created because the data from the old branch or TPA has to be shifted to the new branch as well as new TPA. Lot of difficulty is being faced by the customers in this regard.

It is high time that PSUs come out with policy that either all branches of the company in the same city use the same TPA or instructions should be given to the TPA and data transfer should be immediate. This will result in removing hindrance in shifting from one branch to another.

When one can shift from one company to other then why not portability from one branch to another?

Is prosecution of officials of National Insurance right step?

Is prosecution of officials of National Insurance right step?
According to a news item- 3 officials of National Insurance are to be prosecuted.

Is it a right step? It can happen for those who are working for PSU’s then why not for those who are working for Private Companies? Does it curb innovation, motivation to take decisions? Is it that those who do not take any decision get promoted because their track record is clean? Your comments are invited.