Insurers repudiated an unacceptable Rs 701 cr in life insurance claims; Parliament must step in

The Insurance Regulatory and Development Authority’s (IRDA) Annual Report for 2014-15, states that R701.69 crore life insurance claims were repudiated by insurers.

The Insurance Regulatory and Development Authority’s (IRDA) Annual Report for 2014-15, states that R701.69 crore life insurance claims were repudiated by insurers. The report further highlights that “during the year, insurers have repudiated 8% of the number of claims handled … claims repudiation was high for benefit-based policies at 22%.” This is a disturbing trend as 22% repudiation of claims is unacceptably high for such simple
products.

In a developing economy like India, where one has flagship schemes of the Modi government focussing on crop, life and health insurance for the downtrodden on the one hand and “Make in India” on the other, it is vital to have an insurance regulator absolutely committed to policy holders’ rights.

Had there been a parliamentary oversight in insurance matters, our MPs would have found the amount of claims repudiated unacceptably high in products like life insurance. Even, IRDA in its report does not mention the steps being taken to reduce the repudiation ratio. This is startling, since they are tasked primarily to protect the interest of policyholders.

Individual health insurance: General insurers aggressively sell travel health policies. If the intention is to cover emergency medical expenses incurred by Indian citizens travelling abroad on a holiday or business, the IRDA has defeated this objective by allowing insurers to exclude pre-existing diseases. Imagine the plight of an Indian resident travelling abroad on a holiday, requiring emergency hospitalisation because of a heart attack, being denied the claim because he had a history of heart disease. The medical costs abroad would bankrupt most middle class citizens.

Ideally, a travel health policy should reimburse expenses incurred for emergency medical treatment to stabilise the condition of the policy holder so that he is fit to return home for further treatment. Instead of underwriting risks, insurers use travel agents and travel portals to push sales to healthy people, but deny coverage (even after selling the policy) as they tend to exclude anyone who has a history of heart ailment or diabetes or any other pre-existing condition. This again needs Parliament’s immediate attention.

Corporate commercial lines of insurance: Coming now to the commercial general insurance (covering fire, marine, engineering and miscellaneous classes of business), IRDA does not report the statistics of claims repudiated in fire, engineering, marine or miscellaneous insurances with a detailed analysis
of claims.

The raison d’être of the insurance industry is to make good insured economic losses. It then becomes imperative that IRDA reports facts relating to claims reported, paid, outstanding and repudiated in greater detail.

Repudiation of claims is a serious issue. While individuals can approach the ombudsman’s office for Redressal of grievances, the IRDA has failed to ensure a viable mechanism for commercial entities. There is no mechanism for speedy resolution of disputes, such as Alternate Dispute Redressal. Mechanisms, such as mediation and arbitration, should form part of the policy conditions. With courts clogged with pending cases, ADR is the way forward. We need a regulator who is more forward looking than is presently the case.

IRDA, in its annual report, categorically states that they do not interfere in claims disputes. While that is so, the IRDA should recognise that they must institutionalise a mechanism for speedy dispute resolution. The system should be such that a policy holder should not be required to borrow money from a bank to restart his business. The insurers must meet their liability as quickly and definitely within a fixed time.

IRDA had a ‘File & Use’ system, now modified to ‘Use and File’, whereby each insurance company has to file the full policy wordings to the regulator for approval. However, does IRDA have a mechanism to see whether products approved by them for marketing, respond to genuine claims of the insured? The answer is in the negative—again a pointer towards a very passive regulator. Whereas contract certainty is an article of faith for insurance regulators the world over, in India the regulators think their role is over once the guidelines are issued.

Some of the regulations are baffling to say the least. For instance, those concerning the surveyors. Contrary to international best practice, the IRDA requires surveyors in marine insurance claims (an important class of general insurance) to not only comment on the proximate cause of the loss and the extent of the claim, but also interpret policy terms and conditions. This has virtually killed the remarkable expertise the four PSU insurance companies had in the past. With the exception of a diligent few, most officers now conveniently pay or reject claims on the basis of the surveyors’ comments thereby minimising for themselves any adverse audit reports. Honest officers who take decisions suffer. Those who do not take any decisions over-ruling surveyors avoid an audit or vigilance enquiries against themselves, thereby enhancing their chances of promotion!

The time taken to enforce contracts in court, unfortunately, creates a situation where very few policyholders resort to litigation. Therefore, survey reports do not face the critical scrutiny that they deserve from the courts. Interestingly, IRDA has not taken action, even where the courts pointedly commented on surveyors’ failure to maintain impartiality.

IRDA does not keep track of decisions of the High Courts, Supreme Court and the National Commission. Unless IRDA institutionalises such a mechanism, they will fail to take corrective measures, including forcing insurers to change policy wordings to keep pace with judicial pronouncements. This oversight must also include adverse observations of courts on the conduct of surveyors.

There is a need for the IRDA annual reports to focus on data collected from insurers and surveyors to objectively gauge the efficacy of regulations, particularly in the area of policyholder protection. This will ensure a greater focus on policyholder protection. Till then there is a very strong case for greater parliamentary oversight
of IRDA.

Source: The Financial Express

 

Date: 12th October, 2016

One-third of cos assess job aspirants on gut feeling

While data analytics has had an invincible hold on all aspects of HR, a study reveals that not many organizations measure the impact of assessment tools used to filter candidates for recruitment through data. Infact, a significant number of organizations actually measure the impact based on “gut-feel“.

According to a collaborative study by SHRM India and MeritTrac on talent assessment tools, only 45% of organizations measure the impact of assessment tools through data and a good 30% measure it based on gut-feel. The remaining 25% do not measure impact of assessments at all.

“55% of the organizations do not objectively measure the impact of the assessment tools on business, out of which 25% do not measure the impact at all. These are alarming figures which could influence the possibility to measuring the impact and returns of use of assessments,“ the study noted.

Given the growing emphasis on recruiting the right resource, the spotlight is on the use of assessments for recruitment and organizational development. While assessments have been used as a tool to filter candidates for recruitment for some time now, there has been an increasing emphasis on generating data andinformation about candidates which will play a greater role in their selectionrejection, onboarding and allocation decisions.

The study shows only 58% of 130 organizations surveyed use it for talent management in select stages of employee lifecycle. It said the use of assessment for fresher & lateral hiring and workforce development, individually , is expected to be much lower. At the recent SHRM annual conference, Achal Khanna, CEO, SHRM India, said: “The world today is no longer the one of yesteryears that we remember. Much has changed in the way businesses are conducted and the world itself is in a state of constant change. It, therefore, would be counterproductive for organizations to remain stuck in the best practices of say 2005 or 2010. Better and innovative metrics to measure employee performance are evolving, and organizations must be bold enough to change with the changing times.“

According to the study , only 6% of organizations review assessment data annually through the use of metrics, indicating the need to have systems in place to regularly capture data and build a case for furthering the use of assessment tools.

The study noted that although there is a considerable percentage in usage of analytics and reporting in all spheres of hiring and talent management, there is a need to up the ante and move beyond traditional metrics based on supervisormanager feedback opinions to more quantitative and objective metrics like profit, absenteeism, revenue, etc. One of the top challenges in using assessment tools is cost considerations and inability to justify ROI (return on investment) of assessments (17%). Technology or negative impact on candidate perception are at the bottom of the list, indicating that these are not barriers to adoption of assessment tools. A larger proportion of sampled organizations (72%) spoke of the budget spent on assessments tools remaining the same or lower in comparison to the previous financial year. One of the reasons attributed to this could be the reduction in hiring that is expected in the current year.

Source: Times of India

Date: 7th October 2016

5 WAYS TO Be a Better Learner

Learning is a continuous process, but it can be made faster, more systematic and more relevant. Varuni Khosla talks to experts to bring you five ways to become a better learner:

1 Change Your Mindset

Just because a certain process or school of thought works currently, it doesn’t mean it’ll continue to do so. Things evolve and to be a good learner, you need to evolve too. Internalise the belief that whatever the situation, there has to be a better way of doing things and then go all out to find that way. With this mindset, people put in more effort into learning and eventually it becomes a continuous habit, says Swapnil Kamat, CEO, Work Better Training.

2 Pick a Hobby and Be Consistent at It

“When we make an effort to become really good at something, it naturally builds an ability in us to learn other things faster and better,“ says Mohit Gundecha, CEO, Jombay.

3 Seek Feedback

Whether you are a CEO or an intern at a company, make it a habit to seek feedback from people around you -your colleagues, your boss, your subordinates, your family and even your clients and customers. Ask them for their opinion on your ideas, your way of work, etc. And always take this feedback constructively. Don’t be defensive. Instead, try to understand the logic behind the feedback and try to figure out how you can improve.Feedback is undoubtedly one of the best ways of learning, says Kamat.

4 Challenge Status Quo

Asking a very simple question, “Is there a different, better, faster way of doing whatever we are doing?“ can push us to challenge the status quo and learn things that we had restricted ourselves from learning, says Gundecha.

5 Leverage On-Demand Learning Mechanisms

We learn better when we need to know something than when we are told to learn it. The concept of mobile learning or micro learning for learning reinforcement or on-demand learning is picking up and one can benefit from that, says Gundecha.

Source: Economic Times

Date: 7th October 2016

5 Hiring Trends to Expect in 2016

In order to keep up with today’s competitive job market, many employers will be instituting different hiring strategies in 2016, new research finds.

Besides paying workers higher starting salaries, many employers will focus on giving more opportunities for low-skill employees to move up the ranks, hiring younger interns and looking for new employees from outside the United States, according to a new study from CareerBuilder.

Based on the research, CareerBuilder uncovered several key trends that will help shape the employment landscape in 2016.

 

  • Low skill to high skill: With most employers worried about a growing skills gap, many companies will work on developing their own pipeline of talent. The study found that 33 percent of businesses plan to hire low-skill workers and invest in training them for high-skill jobs.
  • Younger interns: In order to encourage the next generation to pursue STEM-related jobs and other in-demand positions, many employers plan to start building relationships with younger students. The research shows that 25 percent of employers will hire high school students as interns over the next year.
  • Higher salaries: In order to retain and attract top talent, 83 percent of companies expect to increase compensation for existing employees, while 66 percent will offer higher starting salaries for new workers. “While employers have been more willing to pay a premium for high-skill labor, they now have to pay more competitive wages for entry-level positions,” Matt Ferguson, CEO of CareerBuilder, said in a statement. “Workers are gaining leverage.”
  • Crossing borders: To help fill open jobs, employers won’t just be focusing their attention on U.S. employees. Nearly 20 percent of those surveyed will hire workers with H-1B visas in 2016 to temporarily employ foreign-born workers for specialized jobs.
  • Leadership demographics: Many employers plan to diversity their management teams in 2016. The research shows that 55 percent of businesses plan to hire or promote more women for management roles, with 53 percent planning to do the same for minority workers. In addition, 47 percent expect to promote workers under age 30 into management roles.

Overall, 36 percent of employers plan to add full-time permanent employees in 2016, the same as 2015, with just 10 percent expecting to decrease staffing levels. [Hiring Overqualified Employees Might Be Good for Your Business ]

Customer service positions will see the most influx this year. The research revealed that 32 percent of employers plan to add new customer service positions in 2016, with 29 percent adding information technology jobs and 27 percent making new sales hires.

In addition, 24 percent will add production jobs, 20 percent will make new administrative hires and 18 percent will bring on more marketing staff members.

The study discovered that small businesses are much more bullish about their financial prospects in 2016 and are looking to expand their staff.  Specifically, 27 percent of businesses with less than 50 employees plan to hire full-time, permanent employees, up from 20 percent last year. Additionally, 33 percent of businesses with 250 or fewer employees plan to hire full-time, permanent workers, up from 29 percent last year.

The research was based on surveys of 2,338 U.S. hiring and human resource managers.

Source : Business News Daily

Date : January 12, 2016

By:Chad Brooks

 

 

HR in the Age of Disruption

New hires at Blue Apron, a meal kit delivery service that’s taking on takeout, should prepare to spend some time outdoors. The company hosts an annual camping trip where new employees get a taste of its culture—and maybe even a chance to see where its locally sourced ingredients are grown. And at global home-sharing service Airbnb, it’s safe to say that employees love to travel. That’s why the company gives full-time workers $2,000 in Airbnb travel coupons each year.

Whether it involves bonfires or bon voyage bounty, innovative companies are changing the way business is done and the way talent is sourced, developed and rewarded. Not every business can follow their lead on everything—for example, some innovative enterprises staff areas of their business with contingent workers to control costs—but their practices offer much to learn from.

Here, HR leaders at five revolutionary companies—Airbnb, Blue Apron, Etsy, Uber and zulily—share some of the lessons they’ve learned about how HR can help organizations stay creative and competitive while implementing people-centric practices that keep their employees engaged, empowered and thriving.

Our HR disruptors, from left, are Mark Levy, global head of employee experience at Airbnb; Kate Muzzatti, vice president of human resources at Blue Apron; Brian Christman, senior vice president of people and workplace at Etsy; Renee Atwood, former global head of people and places at Uber; and Colleen McKeown, senior vice president of human resources at zulily.

Talent Search

Demand for talent at these fast-growing companies is high, putting pressure on hiring managers and recruiters to fill jobs quickly—and to get creative in how they spot the right person for each open position. Zulily recently invited candidates applying for a job on its social media team to submit an Instagram post that best represented themselves and what they would bring to the team. “It made the candidate selection process as relevant to the job as possible,” McKeown says.

Airbnb’s careers site (www.airbnb.com/careers) takes an inside-out approach to the employee experience by sharing stories and images from its visitors, hosts and employees to help prospective candidates learn about the company and connect with its global community. “Our employee approach is consistent with our customer approach, so aligning the two on our landing page helps prospective candidates understand our business and how integrated the employee experience is to bringing our company vision to life,” Levy says. The site also uses lots of video to tell impactful, real-life stories about what it’s like to work at the company.

‘Disruptors use technology to find and serve customers in ways that didn’t exist before.’

—Harvard Business School professor Clayton M. Christensen,
author of The Innovator’s Dilemma (HarperBusiness, 2011)

Even though the company is growing, Airbnb wants to be intentional and deliberate about increasing its workforce, Levy says. The company has implemented a strategy called Growth By Design to manage head count and leverage fixed-term and contingent workers based on business needs.

Innovative companies know that their employees are often the best ambassadors for their brand and a great source for finding candidates. Referrals are especially important as companies expand across multiple locations. “Employees are our biggest drivers of recruiting—especially for corporate positions here in New York,” says Blue Apron’s Muzzatti. “We encourage referrals on a monthly basis. We send out e-mails about what we call our ‘high-priority jobs’ or our ‘hot jobs.’ We include a cash bonus for those referrals.”

About half of Airbnb’s new hires come from referrals. Most learn about the company through word-of-mouth and social media.

But while referrals are useful for finding people who will align well with a company’s culture, they are not necessarily effective for diversity initiatives, Etsy’s Christman cautions. To expand hiring channels, many enlightened companies partner with groups that can bring new segments of the population into fields traditionally dominated by a particular demographic. For example, Etsy has partnered with Hacker School to provide grants to boost the number of women in technology, while Uber hosted global nonprofit Women Who Code and helped sponsor last year’s Grace Hopper Celebration of Women in Technologyevent. Conferences such as the Historically Black Colleges and Universities’ Innovation Summit are another source of diverse hires.

Screening for Fit, Learning to Grow

Gone are the days when hiring was done in a vacuum and at the sole discretion of a manager. At many 21st century companies, co-workers increasingly get to weigh in on whether they think a candidate is a good fit for a job before he or she is hired. “Experiencing the culture firsthand and meeting the team you’ll work with is one of the best ways to determine fit,” says McKeown of zulily.

Throughout the year, the company hosts onsite events where prospective candidates are invited to come and meet the team, take part in rounds of interviews in a speed-dating-style format, and potentially walk away with an offer. “This is an opportunity to expose a candidate to our fast-paced culture, dedication to working for our customer, embracing change and collaborative team efforts that are expected from successful zulily employees,” McKeown says.

Airbnb conducts two types of interviews: functional/technical interviews that are completed by the hiring manager and those close to the role, and “core values” interviews, in which two employees outside the function for which the candidate is being considered gauge whether the individual embodies the company’s mission and values. Two “no” answers mean the candidate is not hired. If there is a tie, a third “core values” interviewer breaks the stalemate.

Blue Apron makes its top value of lifelong learning core to its leadership training programs for every level of management within the company—from the CEO to shift managers who work in company fulfillment centers. The training focuses on three areas: how managers want to develop as leaders themselves, how they want to help their direct reports develop and how they want to lead across the organization. “We’re going to be training everyone who is a people manager across the company and across all our locations with a similar framework and with a focus around our values and competencies of the company,” Muzzatti says.

One way Airbnb supports employee learning is by hosting “Fireside Chats” that bring in industry leaders—from CEOs to musicians—to share their wisdom and experiences with staff.

Seattle-based zulily hosts monthly events at its headquarters called zUniversities, where innovators from different industries speak with employees.

Ongoing Onboarding

While onboarding approaches vary among the disruptors, the goal is always the same: making sure everyone on the team understands the values and mission of the company and their role in it. Uber flies new full-time employees to San Francisco for a three-day event called Uberversity in which employees get an overview of the company’s business and learn about its culture. That is crucial, Atwood says, because about 40 percent of Uber’s employees are from outside the U.S.

In addition to seeing headquarters, invitees meet other new employees from around the world; attendees often remain close after the program ends. Each group is given access to its own chatroom so that “people continue to interact virtually,” Atwood says.

Etsy assigns new employees an HR partner to assist them throughout their first year. “We believe [onboarding] needs to be immersive and ongoing,” Christman says.

Rest and Rewards

Life at a startup often comes with hours that don’t fit the typical 9-to-5 weekday mode. At the same time, HR leaders at these companies are acutely aware that their employees need and want work/life balance and try hard to encourage that. They urge employees to work with their managers to set expectations and schedules and to build fun into the work experience. “We really want people to own their own schedule and figure out how to balance everything,” Uber’s Atwood says. The company has an unlimited vacation policy and encourages managers to make sure employees take paid time off.

Etsy offers a six-week paid sabbatical to “rest and recharge” for employees who have been at the company five years. It is also one of few companies that provide an astonishing 26 weeks of paid parental leave to new parents. “That could be viewed as a lot of time,” Christman says. “We tend to take the long-term view. We believe [that] by giving that person that time off, [he or she] is going to come back to Etsy and be even more engaged and even more productive.”

Airbnb shuts down its operations (except for customer service) for two weeks at the end of the year. “People work hard, and it’s nice for all of us to have a break at the end of the year to be with family and to recharge our batteries and travel,” Levy says.

Perks are a complex topic at any company, McKeown says, because “what is important to one individual or department may not be as valued by another.” But some benefits seem to have universal appeal—employee discounts, for example. At Uber, full-time employees get credits to use the ride-hailing service, which is a perk that not only helps workers but also gives the company access to employee insights into Uber’s products and services and provides feedback for ways to improve and expand service.

Along the same lines, Airbnb provides its full-time employees with $2,000 worth of travel coupons each year. In keeping with the company’s principle of human-centered design, workers are also surveyed about what would help them be more productive. “No one likes things done to them, so we are always involving employees across the world to provide us with input,” Levy says.

Rethinking Reviews

Forget the annual review. Fast-moving companies opt for real-time feedback so that they always know where employees stand and where they are headed. These companies are assessing performance more frequently and with different twists. The HR team at Uber focuses on harnessing and perpetuating the strengths of their best and brightest by developing training intended to replicate the characteristics demonstrated by its top employees. “At other companies, the focus of reviews is on backward feedback,” Atwood says, “whereas we’re more focused on a forward-looking exercise, where we can actually help people grow and develop.”

Etsy’s feedback system is designed to maximize the role of managers as coaches rather than evaluators. Employees can choose when they get feedback purely for the purpose of learning, Christman says.

At least once a year, employees can poll their peers and direct reports to learn how they are perceived by others. Those asked to give feedback can choose whether to give comments anonymously, and those who receive it can decide whether to seek additional training or coaching from an HR partner or manager.

At zulily, transparency and alignment are built into the review process. Not only can employees set their own goals, they can review their managers’ and company executives’ goals every quarter to “see what the leaders are focused on, ask questions and stay in step with where zulily is growing,” McKeown says.

Mixing and Mingling

Smart companies understand that today’s workers want to be able to talk directly to colleagues on every rung of the corporate ladder. That’s why many are creating opportunities for employees at all levels to have frequent access to top executives and learn about strategic initiatives and challenges firsthand. Zulily holds monthly executive happy hours where employees can visit with executives in an informal setting, McKeown says. There are no presentations at the meetups—it’s just a chance to chat and ask questions.

At Etsy, CEO Chad Dickerson holds weekly office hours that allow employees to drop in for an unscripted Q&A session. Remote employees are included in almost every corporate and departmental meeting via the company’s high-quality video streams, Christman says.

Blue Apron conducts a culture audit twice a year that focuses on how employees feel about their roles and about the management team.

Even though employees work hard, these HR leaders make sure fun and fellowship are also on the menu. Employees are encouraged to share their passion not just for their work but for their outside interests as well, by teaching a course on a favorite subject to co-workers or sharing a talent during lunch. Zulily recently held an open mic lunch at its headquarters where employees could showcase their musical talents. “When you walk the floors of our offices, you will see firsthand our employees living our values and working together to create something special every day,” McKeown says. “There is a really positive energy here.”

Airbnb’s Air Share program allows employees to teach colleagues about their favorite hobbies. The company also has 11 employee resource groups to foster inclusion.

Blue Apron holds a wine happy hour that brings people together to build rapport and allow for networking. “We include overviews of wines that we are selling that month as part of our Blue Apron subscription,” Muzzatti says. The company also hosts a giant annual camping trip for full-time employees, which this year includes working on a farm for part of the weekend. “The engagement for camping is huge,” she says. “Overall, the biggest challenge I have for every part of my job is just keeping up with a highly engaged workforce.”

Surveying the Culture

Blue Apron conducts a culture audit twice a year, asking employees no more than 20 questions that focus on how they feel about their roles and about the management team. The survey is designed to elicit specific feedback on the leadership team. “We ask questions around work/life balance, we ask if people are thinking of leaving the company and why, and then we give people an opportunity to give us feedback,” Muzzatti says.

Geri Coleman Tucker is a freelance writer based in the Washington, D.C., area.

Illustrations by Travis Foster for HR Magazine.
By -Geri Coleman Tucker
Date : Aug 25, 2016

5 WAYS TO Deal With Overwhelming Workload

Competition at the workplace often leads to a huge workload. Rica Bhattacharyya speaks to HR managers on dealing with it.

1 Chart Execution Plan

People tend to jump into execution when there are too many tasks at hand, without sparing time for planning. “To deal with workload, it is essential to plan your day,“ said Sudhir Dhar, director (human resources), Motilal Oswal Financial Services.Think of those key tasks that would help in achieving your goal. You may bucket it into timeline-based tasks, urgent for key stakeholders, tasks that need support and those where you can work independently.Think of the best way to execute instead of working thoughtlessly, he said.

2 Share the Workload

While you may have an endless task list, it is prudent to check the areas where you may require resource and support. “Think about people with whom you can collaborate to execute it smoothly,“ said Dhar. Swapnil Kamat, founder of Work Better Training, said, “No one can do it all, and it is perfectly acceptable as well. Delegate tasks that are not urgent or important and the ones that can be handled equally well by others.“

3 Get Organised

There are many tools available to get organised, set reminders, prioritise, collaborate. “Many people, even today, do not use simple tools like calendar, to-dolist, forms, surveys, forums, templates, libraries, wizards and sharing applications.One has to explore and adopt the ones that suit one’s needs the best,“ said Aditya Narayan Mishra, CEO ­ CIEL HR Services.

4 Work Smart

While there can be no substitute for hard work, smart work can help. “There are tasks which may require your attention and creativity, while others which you may replicate as done before. Identify those tasks and utilise your time for the important work that would create value and help in achieving your goal,“ said Dhar.

5 Relax and Stretch

Feeling bogged down with work is possibly a natural occurrence for most of us. “One needs to relax first and let go pent-up feelings and emotions,“ said Mishra. Some recommend a walk outside the office or workstation, a short nap, a good night’s sleep, a movie, time with friends or whatever helps you relax. Kamat said, “If you start feeling overwhelmed, the first thing you should do is to move away from your work space, go for a short walk and take deep breaths.“ This will help clear your mind and allow you to focus.

Source : The Economic Times

Date: 04-10-2016

NEW PRIVATE INSURERS SHOW INTEREST – PM’s Life Policies for Poor a Flop, but Prospects Bright after Revised Rules

The prime minister’s life insurance scheme for the poor has been a flop in the first year with all the underwriters incurring losses. But prospects are bright as it is drawing many new private insurerssuch as PNB MetLife and others.

Insurers are considering selling Pradhan Mantri Jeevan Jyoti Yojana scheme now after the government has changed its position on earlier claims.

“We are evaluating our options and looking forward to participating in this journey to improveinsurance penetration with our bank partners,“ said Tarun Chugh, managing director, PNB MetLife.

The PMJJY plan was launched by the prime minister last year and was positioned as a social security scheme available for a low premium of `330 a year for cover of `2 lakh. But a flurry of early claims created a viability situation last year. The government addressed the issue this year, when it decided to incorporate the exclusion period. Now, companies can reject early claims within 45 days.

Insurance companies have been seeing claims being made within 45 days of buying the policy . These were mostly suspected to be fraudulent claims. Companies did not have any evidence to show that it is fraud.“About 30-35% of the claims were reported within 45 days of issuing the policy,“ said Girish Kulkarni, managing director of Star Union Dai-ichi.

Insurance companies could not take the health report to exclude those with poor health records.These policies were sold to regular bank account holders under Jan Dhan Yojana. Around 3 crore people enrolled for the scheme. SBI Life had written premium of `200 crore under PMJJY and have paid all this as claims. “Claim experienceunder the Pradhan Mantri scheme was poor,“ said an SBI Life executive. “We expect claims to be 10-15% above premium.“

IndiaFirst Life earned premium of `68 crore while paid out almost double `104 crore as claims in the first year. “We see improvement in claims under the PMJJY program after the 45 days exclusion was brought in,“ said RM Vishakha, managing director of India First Life Insurance. “We see renewal of up to 90% but the sale of new policies have slowed down.“

Source : The Economic Times

Date : 04-10-2016