INDIA: Insurance firm overcharging policy holders, says petition

. MUMBAI (The Hindustan Times), September 30, 2008 By Sunil Shivdasani NEW INDIA ASSURANCE is reaping crores of rupees at the expense of six million of its health insurance policy holders by calculating premiums using their "running" ages instead of their "completed" ages, claimed a petition filed in the Bombay High Court. Petitioner Babulal Shah (73) makes his case based on information he recovered from the state-run giant using the Right to Information Act. He learnt that the company began using its non-standard convention to calculate premiums on its Mediclaim policies in August 2007 as the result of a "corporate decision." So for Shah, the company calculates the premium as though he were 74 years old. Since premiums increase with age, hundreds of thousands of policy holders are paying more than they would to insurers using completed ages. These include United India Insurance, National Insurance, Oriental Insurance, HDFC Standard Life Insurance and Royal Sundaram Alliance Insurance, from whom Shah received written responses. When Shah asked New India Assurance how much extra revenue it was generating from its decision, it asked him to deposit Rs.50,000 as administration fees before it would undertake the calculation. Shah has attached all the insurers' replies to his petition. "I took nine months to prepare this petition," Shah told Hindustan Times which has a copy of his petition. The court heard the plea on September 18, 2008 and asked New India to file its response within a month. Firms in India's insurance sector, Asia's fifth largest, are increasing looking to health insurance for growth. State-run companies such as New India will therefore increasingly face competition. sunil.shivdasani@hindustantimes.com Copyright HT Media Ltd.