The Hindu Business Line : State councils `must join to act as risk cover in medical insurance'

THE Adviser to the Andhra Pradesh Government (Finance Department) and former IRDA (Insurance Regulatory and Development Authority) Chairman, Mr N. Rangachary, lamented about the lack of discipline and control in medical insurance claims.

Speaking on the sidelines of a meeting organised by Link-K Insurance Broker Company (P) Ltd (an insurance broking house), he said that people were not honest in their declaration.

"In a set of group insurance policies in this country, the employees were given an option to add the names of one or more of their family members for cover under the scheme. When an analysis was made to find out why the claims ratio was high, it revealed repeated changes in the list of members covered under the scheme. We lack control and discipline and there is no authority in this country for monitoring this,' he said.

Health, Mr Rangachary pointed out, was a State subject, although there was a ministry at the Centre. He suggested that the different State councils could come together to ensure that the service provided could act as a risk cover.

"The facilities in India are competitive. The demand for such cover is more vis-à-vis the supply. On the other hand, in developed countries, there were more facilities and were very costly too. Unless we improve the situation of both providers and users (on a common platform) for control and risk, we will never improve."

Mr Rangachary stressed on the importance of dealing with homogeneous groups as the risk inherent in employment could be zeroed.

"But it is not easy because only 11 per cent of the total populace was employed. The rest (89 per cent) will have to be covered under individual policy schemes for health insurance cover," he said, adding that the cost of individual policies was at least five times higher than group insurance cover.

"There is room for designing new products to take care of individual policies. That is not all. The ways of reaching this market and the quality of service will have to be taken care of," he said.

According to him, the way to reach out to the masses was not by opening branch offices across the country, as it did not make good business sense, but by leaving it to insurance brokers, who could encourage insurers and use them to popularise the product.

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