Three General insurance companies ICICI Lombard, Star Health insurance and New India assurance has submitted their bids for the Maharashtra government’s Rajiv Gandhi Jeevandayi Arogya Yojana (RGJAY) a health scheme for the poor despite of the General Insurance Council’s (GIC) directive not to bid for it because of refund clause.
GIC has asked the General insurers to desist from agreeing for the refund clause 14 of part one, section A of the RGJAY scheme; GIC has also referred to the Insurance Regulatory and Development Authority’s (IRDA) circular which advised insurers not to agree to profit sharing while bidding for the tender.
GIC has the objection on the clause of the scheme which says that insurer have to return the 90 % left over fund to the government after claims at the end of the policy term.
GIC is a statutory body under the Insurance Act 1938 representing all General insurers in the country.
RGJAY have short listed ICICI Lombard, New India assurance and Star Health Insurance. Successful bidder will get the premium of about Rs 2,000 crore.
ICICI Lombard’s bid is likely to be the lowest. ICICI Lombard in its justification has said that they have received the directive from the GIC after they have submitted the bid. Company also said that the directive was recommendatory.
However other non-life insurers are not happy with companies who have submitted bids for the scheme despite the GIC’s directive and have decided to take this issue to the IRDA and Maharashtra government.