Health Insurance – For protection of Health but of WHOM – BANK OR UIIC ????
Recently, IBA has issued communication No. [ORDINANCE]No. CIR/HR&IR/J/2019-16/1169 dated October 1, 2018 to its Member Bank intimating the adamant attitude of UIIC for not extending the policy for 30 days to enable IBA to discuss in its Managing Committee & with Member Banks. IBA further advised to pay renewal premium which is 112% higher and threatened Member Banks in the said communication as “In the absence of renewal of the policy, liability on account of hospitalization claims by employees post 30.09.2018 will have to be honored by banks.” [Ex-A]In the communication of IBA, it is also mentioned that 15 banks have remitted the premium for renewal as demanded by Insurer i.e. UIIC.
The efforts of IBA were supported by the workman Union by advising their units on 1/10/2018 “ Our units in other Banks should immediately pursue the matter with their management to ensure that the policy is not allowed to lapseand employees do not get uncovered by the benefits of the policy.”[Ex-B] In the circular of Workmen Union, it is reported that 18 Banks have paid the premium. i.e. 15 reported by IBA and 3 more, Federal, UCo and Vijaya Bank. This facts itself reveals the role of Union to safe guard the Bank Employees to have continued cover.
The Officer Organization too issued communication to IBA on 1/10/2018 to get” renewal of the Insurance Policy as per the original terms negotiated “and in the absence of which, IBA must decide taking a legal recourse against the Insurance Company or approaching Consumer Forum and also member Banks may immediately be advised to honour the claims of the employees to the debit of their establishment expenses. [Ex-C]
Let us examine the facts from Insurance Company’s angle:-
The statement of premium received & claim paid is sourced from AIBEA circular No.27/210/2018/43 September 26, 2018 and same is as under:- |
NAME OF BANK
|
ANNUAL PREMIUM PAID IN 2019 RS. | CLAIMS PAID + CLAIMS OUTSTANDING (INC. DOMICILIARY) RS. |
-
| PUNJAB NATIONAL BANK | 40,37,65,216 | 67,65,13,888 |
-
| CANARA BANK | 31,06,24,387 | 51,79,83,971 |
-
| BANK OF BARODA | 29,88,93,275 | 58,61,81,248 |
-
| CENTRAL BANK OF INDIA | 22,09,56,516 | 40,31,58,983 |
-
| UNION BANK OF INDIA | 21,31,98,633 | 33,90,46,777 |
-
| INDIAN OVERSEAS BANK | 18,92,47,347 | 38,27,57,998 |
-
| BANK OF INDIA | 18,63,19,972 | 28,70,16,534 |
-
| SYNDICATE BANK | 18,47,99,781 | 28,63,29,127 |
-
| UCO BANK | 14,39,94,675 | 24,06,62,496 |
-
| ALLAHABAD BANK | 14,38,72,601 | 22,94,43,092 |
-
| OBC | 12,58,39,603 | 23,9937,141 |
-
| INDIAN BANK | 11,98,10,828 | 21,25,38,425 |
-
| ANDHRA BANK | 11,95,38,950 | 18,74,82,060 |
-
| CORPORATION BANK | 11,02,76,098 | 19,01,51,540 |
-
| SBH | 10,75,34,013 | 20,32,98,907 |
-
| UNITED BANK OF INDIA | 9,75,40,012 | 14,84,61,564 |
-
| BANK OF MAHARASHTRA | 8,76,20,334 | 19,03,81,901 |
-
| SBT | 8,47,80,301 | 14,83,72,930 |
-
| VIJAYA BANK | 8,46,88,426 | 14,84,43,798 |
-
| DENA BANK | 8,24,41,180 | 15,88,05,543 |
-
| SBP | 7,55,84,531 | 10,58,07,890 |
-
| FEDERAL BANK LTD. | 6,81,15,359 | 12,48,61,938 |
-
| SBBJ | 6,72,32,061 | 9,62,45,240 |
-
| PUNJAB & SIND BANK | 6,63,97,355 | 11,35,35,087 |
-
| SBM | 5,36,43,675 | 11,51,67,889 |
-
| SOUTH INDIAN BANK | 4,49,34,101 | 5,65,21,669 |
-
| KARNATAKA BANK LTD. | 4,34,01,163 | 5,80,92,150 |
-
| KARUR VYSYA BANK | 4,10,87,795 | 5,48,09,199 |
-
| THE J&K BANK LTD. | 2,99,02,366 | 1,96,61,848 |
-
| KOTAK MAHINDRA BANK | 1,76,01,420 | 5,18,11,428 |
-
| LAKSHMI VILAS BANK | 1,65,63,348 | 2,93,35,849 |
-
| DHANLAXMI BANK LTD. | 1,34,55,536 | 3,28,62,400 |
-
| CATHOLIC SYRIAN BANK | 1,23,77,855 | 1,60,49,760 |
-
| THE NAINITAL BANK LIMITED | 46,01,214 | 94,39,643 |
-
| THE RATNAKAR BANK LTD | 28,42,889 | 85,84,845 |
-
| CITI BANK | 18,80,659 | 24,87,196 |
-
| IBA | 2,17,745 | 4,46,920 |
-
| BNP PARIBAS | 89,077 | 53,078 |
-
| BANK OF AMERICA | 62,625 | 1,26,875 |
|
|
|
|
Grand Total | 3,87,57,31,924 | 6,67,28,68,825 |
| 387 CRORES | 667 CRORES |
While reviewing the table, surprisingly at Sr.No.37, the employees of IBA (non registered organization) are also covered in the Health Insurance Policy. The Medical Insurance Scheme was negotiated during 10th Bipartite Settlement and is, therefore, a part of the same. The 10th Bipartite Settlement took place on 25/05/2019 between Trade Union o Banks & Voluntary Association of Management of Bank [IBA] and IBA signed this Settlement on having Mandate from the Bank.
In this context, it is not clear which Union / Officer Association represented IBA Employees in the settlement and which authority has given mandate to IBA to sign Settlement on behalf of IBA Management. Further signatures on the settlement, reveals signatures of Managements of Banks & Trade Union / Association, does not reflect even remotely that settlement also covers IBA Employees. Thus act of IBA to cover its own employees is not only ultravires but also in violation of IRDA guidelines on Group Health Insurance more particularly clause 7 A of Health Insurance Regulations 2018 [Ex-D] published in Government Gazette, which reads as under:- “No Group Health Insurance Policy shall be issued by any Insurer where a group is formed with the main purpose of availing itself of insurance. There shall be clearly evident relationship as specified by the Authority from time to time between the members of the group and the group policy holder”.
The above statement of premium and claim reveals the fact that Insurer has paid claims 172.35% of the claim received amount. It is not clear how much amount is contributed towards domiciliary treatment. Off course UIIC, which is in business of Insurance since 1938, being commercial organization is not expected to incur loss from the transaction and its act of increasing premium at renewal seems to be obvious, though illegal, arbitrary and against not only terms of contract [contract of insurance] but IRDA directives too.
The act of Insurer is illegal as it acts are violation of IRDA on following counts:-
1] Insurer cannot load premium more than 18% as agreed at clause 5.18 of the Policy Issued by the Insurer.
2] The act of the Insurer to revise premium upward with short notice is in violation of policy term reflected at clause 8 which clearly states that “We shall notify you of such changes at least three months before the revision are to take effect”. Under these circumstances the act of Insurer to deny extension of cover for 30 days more to decide on renewal is absolutely illegal and arbitrary.
3] The act of the Insurer to enhance the premium 112% at renewal is in violation of regulation 10 [C] of Health Insurance Regulations 2018.
4] The Act of Insurer to enhance the premium by 112% is in violation of regulation 25 [ii] of Health Insurance Regulations 2018.
Now all the issue of enhanced premium of 112% has be raised at the time of renewal without giving 3 months notice to policy Holder and dictating policy holder to succumb to their illicit tactics.
Let us now clear what Supreme Court Says about “Renewal” of policy:-
“A renewal of an insurance policy means repetition of the original policy. When renewed, the policy is extended and the renewed policy in the identical terms from a different date of its expiration comes into force. In common parlance, by renewal, the old policy is revived and it is sort of a substitution of obligations under the old policy unless such policy provides otherwise. It may be that on renewal, a new contract comes into being, but the said contract is on the same terms and conditions as that of the original policy” [BIMAN KRISHNA BOSE Vs. RESPONDENT: UNITED INDIA INSURANCE CO.LTD. & ANR- Appeal (civil) 2296 of 2000]
The honorable J. Khare & Patil further made it clear that “Where an insurance company under the provisions of the Act having assumed monopoly in the business of general insurance in the country and thus acquired the trappings of the State being other authorities under Article 12 of the Constitution, it requires to satisfy the requirement of reasonableness and fairness while dealing with the customers. Even, in an area of contractual relations, the State and its instrumentalities are enjoined with the obligations to act with fairness and in doing so, can take into consideration only the relevant materials. They must not take any irrelevant and extraneous consideration while arriving to a decision. Arbitrariness should not appear in their actions or decisions. In the present case, what we find is that arbitrariness is writ large in the actions of the respondent company when it refused to renew the mediclaim policy of the insured on the ground of his past conduct i.e. having gone into litigation for payment of his claim against the respondent company. We are, therefore, in agreement with the view taken by the High Court that the order of the respondent company refusing to renew the medi-claim policy of the appellant was unfair and arbitrary”.
Further Apex court while allowing the civil Appeal of Policy holder also allowed cost of Rs.5000/-. Incidentally, the respondent in above Civil Appeal and Lead Insurer in IBA induced / Introduced Health Insurance Scheme is UNITED INDIA INSURANCE only. Copy of the Judgment attached as Ex- E.
On 19/06/2019, South Mumbai District Forum ordered an Insurance Company [Pravin Shah Vs New India Assurance Company] ordered to refund the excess premium charged through loading.
It is illegal to refuse renewal of policy. So when an Insurance Company doesnot want to renew a policy that has become onerous, it adopts the backdoor method of loading the premium excessively, making it unaffordable for the insured, who may then voluntarily opt out. In present case, UIIC is adopting the same route.
The IBA is voluntary association of Management of Banks and is expected to act in the Interest of Bank while dealing with the Insurer Company but on the contrary IBA is compelling its member to renew the Health Insurance Policy and pay insurance premium of Rs. 821 crores on renewal to UIIC .
IBA is so panic for renewal of Health Insurance Policy and acting contrary to object for which it is formed.
Enclosed Ex-F reveals that, Insurer had paid claim 72 % of above premium but premium is loaded 112%. WHY again 40% overloading???
· BNP Paribas is eligible for 5 % discount but has to pay 112% more.
Click on the following links to view annexures referred above,
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