HIGH INSURANCE LOADING DESPITE IRDA DIRECTIVE

How effective is the Insurance Regulatory and Development Authority (IRDA) directive over loading (increase) of premium during health insurance policy renewal? Despite the March 2008 instructions to public sector general insurance companies to cap loading at 75% of previous year's rates and to set up a grievance cell for the category, complaints from senior citizens continue to pour in. A high-ranking insurance official, who does not wish to be identified, says "these half-hearted measures don't work" as the regulation was issued more in the form of an advisory than a notification. In March again, P N Ojha of Mumbai-who has held a family health policy with New India Assurance Company for 19 years without making a single claim-was in for a shock when his policy went up for renewal. He was asked to pay a premium of Rs 29,401, which amounted to an over 100% loading over the previous year's Rs 14,485. New India Assurance CMD B Chakrabarti, though, says this lapse could be the result of "some operational problem" and asks the consumer to write in to get it rectified. Ojha's grouse, though, does not end here. "I received the renewal letter just days before the policy's expiry, so there was no room for discussion or negotiation. Since I am 74, I had to accept the terms. If I were to approach another insurer, they would not have accepted my application." (The insurance official says insurance companies are "very careful" with applicants who have crossed 65 years of age. An industry observer had earlier noted in this column that insurance agents are also discouraged from bringing in senior citizens). Kirti Bhatt, director, legal, at Ahmedabad's Consumer Education & Research Centre, thus emphasises that seniors cannot afford to remain without a policy. He advises them to pay the premium and only then dispute the loading. "If there is a break, an insurer will consider the new application as a fresh policy and exclude existing diseases under the pre-existing diseases clause." That is, if the insurer accepts the application in the first place. Ojha, who paid the renewal premium, has a bigger grouse with IRDA itself. He had written to the regulator's cell, which attends to senior citizens' grievances, with his case details. "Four months passed without a reply." When contacted, the new IRDA chairman Jandhyala Harinarayan asks the consumer to write in again. "We are here to help out," he assures. In another interesting twist to this case, a few days ago, Ojha received an envelope from the insurer. It contained a premium refund intimation voucher of Rs 4,028, saying "it is hereby agreed and decided to refund excess premium to insured persons above 60 years who have renewed their policies between August 16, 2007 and April 9, 2008". Ojha adds that even with this discount, the loading on his premium remains slightly above 75%. Meanwhile, K S (Kaka) Samant, general secretary at the General Insurance Pensioners' Association (western zone), advises senior citizens, whose complaints continue to languish at the IRDA, to approach the ministry of finance.

Source: The Times of India