The Hindu Business Line : NICL moves to cap claims in medical cover

The NICL's Chairman and Managing Director, Mr V. Ramasaamy, told Business Line, "We found leakages mostly in the room rent component and we are attempting to cap it." He said that the proposal was to restrict the room rent component to one per cent of the sum assured.

In addition, NICL had also held discussions with the hospitals for standardisation of healthcare rates. The standardisation involved categorising hospitals.

Discussions on

However, Mr Ramasaamy said only some of the large hospitals in Delhi and Bangalore were prepared for such standardisation. These steps were still at the discussion stage, he added.

Such steps, he said, would help contain the claims in the medical insurance. NICL proposed to add two more medical insurance products.

These would be targeted specifically at youngsters and the older generation, he added.

Motor insurance

Referring to motor insurance claims, Mr Ramasaamy said that some tightening was being put in place. However, he clarified that there were no rejections of underwriting since motor insurance was statutory. Instead, NICL was accepting only renewals of existing covers, he added, but going slow on accepting new covers, especially commercial vehicles and third party covers.

But the company had also put in place a system for limiting claims outflows. This system included resorting to out-of-court settlements with the counter parties. Such settlements would effectively help in reducing costs, he said.

In addition, the company had also sought for claims settlements within a period of 15 days from the day it was awarded. This settlement, Mr Ramasaamy said, would enable the company to save on interest payments.

Interest is now levied at 9 per cent for delayed claim settlements. Referring to claims settlements after the Mumbai floods, he said, NICL had incurred claims of just Rs 10 crore. Most of these claims were already settled, he added.

Premium accretions

For the current year, the company has targeting an 11 per cent growth in premium accretions. But for the first 11 months of the last financial year, the company had earned a premium of Rs 3,423 crore, or about 6 per cent lower than the previous year.

He said that the company was preparing for full deregulation in the industry.

The insurance industry is expected to go into full de-tariffing with effect from January 2007.