Tag Archives: Claim Settlement

Specify TPA’s Role in Settlement Norms: HC to IRDA

Posted on January 8, 2013 by
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TPA PolicyMantra

Bombay High Court has directed Insurance Regulatory and Development Authority (IRDA) to go ahead with the process of finalizing regulations for settling insurance claims and the role of Third Party Administrators (TPAs) and powers of ombudsmen.

This directive of HC has come while hearing a Public Interest Litigation (PIL), which had alleged that there are no standard guidelines to settle claims and it is left to the whims and fancies of the TPAs who are in fact not entitled to settle claims but are found to be doing so in several cases. PIL also said that TPAs receives financial incentives to reduce claim ratios. It also said that there is discrimination in settling insurance claims of individuals and that of corporate clients.

IRDA had told the Court that it has submitted draft regulations which would be placed before the finance ministry for final approval.

Directing IRDA to go ahead with the process, the HC asked IRDA to state whether more powers could be given to the ombudsman while hearing consumer complaints.

Ombudsman as of now only has power to decide the approval or rejection of a claim but it has not empowered to impose penalty or increase the claim amount.

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HC Suggested IRDA to Set Up an Ombudsman for Policyholders

Posted on December 14, 2012 by
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The Bombay High Court has suggested Insurance Regulatory and DeIRDAvelopment Authority (IRDA) to set up an ombudsman to address insurance related grievances of consumers.

The suggestion was made by the HC while hearing a Public Interest Litigation (PIL) pointing out the hardships being faced by medi-claim policyholders.

HC said that IRDA should consider setting up a forum or an ombudsman to look into the insurance related complaints, instead of dragging such cases to court or consumer forum.

In reply, IRDA said that draft guidelines have been prepared for settling of insurance claims and it will be placed before its board for consideration.

The PIL alleged that there were no standard guidelines to settle insurance claims and it was often done at the whims and fancies of Third Party Administrators (TPAs).

The PIL argued that, TPAs are not entitled to settle claims, but are found to be doing so in several cases. PIL also said that TPAs receives financial incentives to reduce claim ratios. And there was discrimination in settling insurance claims of individuals and that of corporate clients.

According to the PIL, problem began in July 2010, after public sector insurance companies, acting through TPAs, suddenly stopped offering cashless medi-claim benefits to consumers in top hospitals in the metros.

Earlier, over 1,500 hospitals use to offer cashless policy claims and there was no need for a patient to bother about paying cash while undergoing treatment as it would be settled by the insurance company.

The scheme was withdrawn as many irregularities were found in it.

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IRDA to Make Claim Settlement a Speedy Process

Posted on June 5, 2012 by
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claim settlementInsurance Regulatory and Development Authority’s (IRDA) draft guidelines on health insurance sector has proposals that can bring clarity on many critical issues such as claim settlement, if draft guidelines finalized in its current form then it will make claim settlement a speedy process.

 

In its draft guidelines IRDA has proposed that within 30 days of receipt of complete documents, an insurer have to settle the claim. If the insurer, for any reasons to be recording in writing and communicated to the insured, decides to reject a claim under the policy, then it should do it within 30 days from the receipt of complete documents.

 

IRDA has also sought to standardize the operations of the Third Party Administrators (TPAs) who play a key role in processing the claims. As per the proposed provision TPA will have to compulsorily explain the rationale behind claim rejection.

 

This move of IRDA has followed the series of court decisions against the health insurers pertaining to settlement of claims. Then IRDA had promised to frame the guidelines pertaining to health insurance claims.

 

At present, though there are regulator mandated norms for claim settlement but in the absence of standard claim settlement norms, there have been cases where claim disbursement was delayed up to six months.

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IRDA Issued Draft Guidelines for Health Insurance Policies

Posted on June 1, 2012 by
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IRDA GuidelinesIn its draft guidelines on health insurance policies, Insurance Regulatory and Development Authority (IRDA) has suggested sweeping changes. Once these guidelines come into effect, it will not only be beneficial for policyholders but it will also increase the transparency of the business.

 

Draft Guidelines

Entry age: IRDA has recommended that anyone up to the age of 65 years can buy a health insurance product. It will be beneficial for senior citizens as till now insurers could deny health cover for people over 60 years as it was not mandatory.

 

Renewability: IRDA has also suggested lifetime renewability of health insurance product. Till now insurer had set the renewability age at just 50-55 years based on past claims.

 

Hospitalization: If these guidelines come into effect, than the preferred network of hospitals clause will be removed. That means you don’t have to find a hospital which has an agreement with your insurer at the time of need, you can go to any hospital for the treatment.

 

Policy document: IRDA has also sought more clarity from the insurer at the time of policy issuance and settlement. For the customer’s ease a standard policy form will be issued, which will highlight the important policy details for the customers.

 

The policy document will also required to mention the cumulative bonus that a policyholder earns. Insurer rewards policyholder with bonus, if he doesn’t make any claim for a specified period.

 

Settlement: At the time of settlement, IRDA has introduced a form asking insurance company to provide clear reasoning for claim rejection.

 

Insurer is also required to provide detailed explanation at the time of loading of the policies. Loading refers to the increase in the premium after the claim has been made.

 

Multiple policies: If you have more than one health insurance policy, you can get your claim settled by any of the insurer. It is left to the Insurers to settle the bill amongst them later. Earlier insurers had to share the claim payouts which lead to delay in claim settlement.

 

Alternative treatments: IRDA has proposed that non-allopathic treatment in government recognized hospitals should come under the ambit of health insurance.

 

Standard definitions: Due to absence of standard definitions insurers were rejecting claims. Hence, there will be definitions for many terms.

 

Medical reimbursement: You will get a full refund for the medical test you undertake before taking a policy. The medical reimbursement for the policyholder is pegged at 50% for non-life insurance policy and 100% for life insurance policy.

 

Policy tenure: IRDA has proposed that any policy of Life Insurance Company should have minimum tenure of four years while any health insurance policy by general insurer should have maximum tenure of three years. Rationale behind this move is that longer tenure allows better servicing of the policy.

 

However, insurers are not excited with the guidelines as per them it has some suggestions that restrict competition and innovation in the industry.

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MediPrime: Domestic Lifetime Renewable Health Policy from Tata AIG

Posted on April 24, 2012 by
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Media Release

Tata_AigTata AIG General Insurance Company today announced the launch of their first domestic lifetime renewable reimbursement health insurance policy: MediPrime.

 

This innovative health insurance plan is a comprehensive offering with a unique set of features that distinguishes itself from the existing gamut of health insurance products currently available in the market. The introduction of MediPrime adds to the set of general insurance products offered by the Company and has been designed specifically to cater to the retail consumer market inIndia.

 

Commenting on the launch of MediPrime, Mr. Gaurav D Garg, MD & CEO, Tata AIG General Insurance Co. Ltd. said, “We are proud to announce the launch of MediPrime; a product that has been designed specifically to meet the current requirements of the consumer and ensure that their needs from a health policy are met. Customer Delight is an important pillar of our Company values and MediPrime, with its’ strong customer service commitments and service initiatives will provide our policyholders a wholesome experience.”

 

With the launch of MediPrime, Tata AIG General has imbibed numerous initiatives into MediPrime, to strengthen their customer focused approach. The company assures that all customers applying for MediPrime will receive a decision from the company within 24 hours notifying them of their acceptance and the suitable premium. Additionally, all cashless claims would be authorized within 4 hours on receipt of all documents and claims would be settled in 7 working days after completion of formalities.

 

Under MediPrime, a policyholder can avail the cashless hospitalization benefit; which is currently available through a network of over 3000 hospitals. The policy also provides added benefit of a family discount wherein a discount of 10% is allowed if 3 or more members of the family are covered under the individual plans.

 

Having structured and designed the product to suit customer needs, MediPrime comes with a set of unique features that sets it apart from others in the market. Some of them include:

  • No sub-limit for inpatient hospitalization
  • No Co-pay
  • Inpatient and outpatient coverage for Accidental Dental treatment.
  • Ayush Benefit : Coverage for Non-allopathic in-patient treatments like Ayurvedic, Unani or Homeopathy

 

MediPrime provides a comprehensive set of benefits that every individual looks for in a health insurance policy like cashless hospitalization, domiciliary & 140 day care procedures without any sub-limits. It also extends coverage for pre and post hospitalization expenses. Distinct features of the product include its lifetime renewability clause and its zero loading charges on renewal in case of a claim.

 

The product is available to individuals between the ages of 18 to 65 years and also offers the unique benefit of lifetime renewability for existing customers. The policyholder is entitled to tax benefits under section 80D of the Income Tax Act 1961.

 

Other benefits of this product include:

 

  • Pre and Post Hospitalization Medical Expenses – 30 days before hospitalization and 60 days immediately after discharge
  • Health check-up at the end of 4 continuous renewals for every insured person
  • Emergency Ambulance Expenses

 

 

Tata AIG General Insurance Company

 

TataAIGGeneral Insurance Company provides insurance solutions to individuals and corporates. It offers a complete range of general insurance products including insurance for automobile, home, personal accident, travel, energy, marine, property and casualty as well as several specialized financial lines. Tata AIG believes in offering innovative and relevant insurance solutions in the retail and commercial space. Each product offering is backed by expertise and an unparalleled claims service.

 

Tata AIG’s products are available through various channels of distribution like agents, brokers, banks (through bancassurance tie ups) and direct channels like Tele Marketing, Digital Marketing, worksite management etc. Tata AIG has its operations in 59 cities.

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Cholamandalam MS Wins Best Insurance Company for Timely Claim Settlement

Posted on April 12, 2012 by
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CholamandalamCholamandalam MS General Insurance Company has been awarded the best insurance company for ‘In time claim settlement for 2011-12 under Rashtriya Swasthya Bima Yojana (RSBY) scheme of the ministry of Labour and Employment. Cholamandalam MS was awarded for timely settlement of claims for hospitals offering cashless treatment facility to Rsby subscribers.

 

The award was given on 9th April 2012 by the Union Labour and Employment minister, Mr. Mallikarjuna Kharge, at a workshop in Ranchi, Jharkhand.

 

Cholamandalam MS general insurance is a joint venture between Murugappa Group and Japan based Mitsui Sumitomo Insurance Group.

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Bharti Axa Launched its First Online Term Insurance Plan

Posted on February 6, 2012 by
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bharti axa lifeTo tap the increasing penetration of internet private insurer Bharti Axa Life Insurance has forayed into online distribution channel with its first online term insurance plan by the name Bharti Axa life iProtect.

 

According to the company Bharti Axa iProtect is one of the most competitive term insurance plans that is available in the market. Company also has built functionality as a part of user interface that will help the customer to purchase the policy in few simple steps.

 

As per the company iProtect is an online term plan and the moment of the truth for this category is claim settlement. At the time of distress the family of deceased may require money immediately to meet unforeseen expenses. In such situation company’s unique service guarantee ‘family care benefit’ that ensures a release of Rs 100,000 within 48 hours of claim intimation can prove to be beneficial for policyholders.

 

E-commerce in financial services has been growing by 30% year-on-year basis for last three years and insurance is a significant contributor to it.

 

As per the company online will be the important part of its distribution strategy. Company also said that consumers are now a days preferring online distribution channel because of its affordability, convenience and accessibility.

 

Bharti Axa Life Insurance is a joint venture between Bharti Enterprises Holding 74% stake and France based Axa Holding 26% stake.

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General insurers refraining from using services of TPAs

Posted on January 20, 2012 by
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Third Party Administrator TPAIn a bid to curtail costs and increase operational efficiency general insurance companies are turning away from using services from Third Party Administrators (TPAs) and setting up their in-house team for managing and settling health insurance claim.

 

Earlier only pure-play health insurance companies such as Star Health and Max Bupa health insurance abstained from using the services of TPAs and handled their own claim settlement process.

 

TPA for health insurance is a unique concept introduced by Insurance Regulatory and Development Authority (IRDA) in 2001. TPAs functions as an intermediary between insurance company and customers and facilitate cashless service at the time of hospitalization. As of October 2011 there were in all 29 TPAs in India.

 

As per insurers TPA handles multiple clients and multiple hospitals but when company deals with customers directly they take full responsibility hence there is no administrative delays or hassles.

 

Insurance companies need to have direct tie-up with hospitals, invest in software, technology and in-house work force to handle the entire health insurance claim settlement process.

 

As per insurers though in-house health claim settlement will help to save just 2-3% cost every year but company officials will get better sense of responsibility towards the customers and company would be able to offer better services to the customer helping them to higher customer retention rate.

 

Chola MS is handling claim processing in-house for few years. Future Generali has also started it and Reliance general is also in the process to start it on its own.

 

Four public sector general insurers that have about 45% market share in health insurance are also thinking to set up captive TPA so that they can have better negotiative powers with hospitals.

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Bharti AXA’s GWP up by 47% in 2011

Posted on January 19, 2012 by
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Bharti AxaDuring 2011 private insurer Bharti Axa General Insurance Company’s Gross Written Premium (GWP) grew by 47% at Rs 776 crore against Rs 528 crore in previous year. During 2011 company sold 6.5 lakh policies as compared to 4.86 lakh in 2010. Company settled 1.2 lakh claims in 2011 against 74,006 in 2010.

 

Motor insurance contributed 70% to the total business of the company while Health and personal accident insurance contributed 18%. Commercial line contributed 12% to the company’s total business.

 

Delhi and NCR, Mumbai, Ahmedabad, Hyderabad, Bangalore and Kolkata contributed 56% to company’s overall retail business.

 

On a zonal basis west zone was the highest contributor in company’s GWP with 36% while north zone contributed 35%.

 

Tier II cities contributed 21% to total retail business of the company while tier III cities contributed 23%.

 

Bharti Axa General at present has in all 58 products catering to rural, semi-urban and urban customers. It also has products catering to small enterprises and large industries. In 2012 company is expecting growth of 35-40% in its top line. To achieve this growth target in 2012 company is planning to launch a range of new health and motor insurance products.

 

Under health insurance segment company is planning to launch products/add-ons such as Smart Traveler for students, individuals and corporate, Smart tax saver and micro-insurance and retirement health insurance products. Company has also filed for unlimited health cover product.

 

Under motor insurance segment it will also provide add-ons such as hydrostatic lock cover, EMI/outstanding loan protection cover, load body transfer, zero depreciation cover for two-wheeler and consumable covers.

 

Going ahead Company will focus on tier II and tier III cities for future growth. Company in 2012 is planning to improve its internal efficiency and it is also seeking organizational growth. Company will also enable internet capabilities for service delivery and claim settlement. Company will focus on retail business rather than commercial lines. In 2012 company will be focusing more on health insurance segment then motor insurance segment.

 

In 2011 company’s market share grew to 3.69% as against 2.94% in 2010.

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State forum directed insurance company to pay compensation

Posted on January 18, 2012 by
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claim settlementState consumer disputes redressal forum has directed an insurance company to pay Rs 3.56 lakh with 7.5% interest from 9 February 2008 along with the cost of Rs 2,000 to Ujval Deep Gaderao Saheb a resident of Thiruvaiyaru as reimbursement for his car repairing.

 

Ujval Deep on 31 March 2006 had bought a Ford Fiesta. He also got it insured. He registered the car temporarily which was valid from April-June 2006.

 

On August 2006 his car met an accident in which no one was injured but car got damaged. Ujval Deep informed about it to the insurance company.

 

But insurance company refused to reimburse the amount of repairing saying that driving a vehicle without a valid license is an offense under motor vehicle act.

 

Ujval Deep approached the district consumer disputes redressal forum which in April 2010 dismissed the complaint. Then Ujval Deep approached the state forum.

 

State forum observed that this is no where stated that insurance company is not liable for reimbursement if vehicle is not permanently registered. In this case Vehicle was insured before it got registered with effect from 31 march 2006 whether it was permanently registered or temporarily registered. This shows company has undertaken to indemnify the car owner if anything happens during the coverage period.

 

Forum also said though Ujval Deep has committed an offense by driving a vehicle without permanent registration but it does not invalidates the terms of the policy.

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