INDIA: New mediclaim norms to shield senior citizens

. KOLKATA, India / The Economic Times / Insurance / January 28, 2009 Debjoy Sengupta, ET Bureau WHEN Sharmila Saxena, a 70-year-old housewife, had checked into a top-end heart clinic for her first bypass two years ago, she ran up a bill of nearly Rs 275,000. But armed with a mediclaim cover, her family scarcely had reason to fret. The insurer did honour the claim, but the reluctance showed. A month later, her policy was up for renewal and that was when the shock came. The insurer flatly refused to renew, unless husband Srikumar agreed to take a 150% jump in the premium! Sharmila Saxena’s plight is not an isolated case. Insurers have made a habit of grumbling about old peoples’ claims and about refusing to renew existing policies of senior citizens unless they go for a premium hike. And yet, why should it be so? Statistics issued by the Tariff Advisory Committee (TAC) reveal that in 2007-08, 1.5 million senior citizens out of a total of 24 million individuals were covered by health policies. And they accounted for merely 16% of the total number of claims filed. Although there’s no precise data on the actual number of mediclaim renewal rejection cases for senior citizens, insurance industry circles concede that the number runs into thousands every year. In the middle of 2007, ET had reported about the General Insurance Council having initiated work on a set of guidelines to make it known in advance whether a policy could be renewed or not. The move fizzled out. Now, however, a fresh move has been initiated which might bring relief to thousands of beleaguered senior citizens if the insurance bosses all agree. It seems that the general insurance industry is now re-writing the rule book and the buzz is that senior citizens will not be denied renewal of mediclaim policies merely due to an unfavourable claims experience. This was confirmed by General Insurance Council general secretary SN Mohan. He said: “As instructed by the Insurance Regulatory Development Authority (Irda), the council is now trying to ensure that senior citizens are not denied policy renewal just because the insurer has had an unfavourable claims experience”. “The insured will also be informed about changes in terms of policy, exclusion of diseases and reasons why premium is being hiked,” he said. Copyright © 2009 Bennett Coleman & Co. Ltd.