Page 40 - Insurance Times August 2023

Health Insurance

Claims

Mismanagement in

PSU Insurers is an Jagendra Kumar
Ex. CEO,
Pearl Insurance Brokers
eye opener JAIPUR

The IRDAI has brought in multiple reforms in order to fix issues related to mismanagement of claims.
For fixing the issue, IRDAI has notified a draft health insurance regulations statement where it
has been stated that TPAs do not have the right to reject claims and this will exclusively be the
right of the insurance company.

ut of the 32 general insurance companies which multiple claim settlements, excess payment over sum insured,
O do health insurance business in India, there are and breaching of capping limit for specific diseases are some
of the lapses by four public sector insurers that the
only four public sector general insurance
Comptroller and Auditor General of India (CAG) has flagged
companies: The New India Assurance Company
Limited (NIACL), United India Insurance Company Limited in its report. The gross underperformance and multiple
(UIICL), The Oriental Insurance Company Limited (OICL) and irregularities have made India's four PSU general insurers
National Insurance Company Limited (NICL). The Comptroller lose out to private players. This is evident from the June
and Auditor General (CAG), during its audit of the four PSU quarter results of the companies. Even when the market
insurance companies found mismanagement of Health share of the private companies rose to 51.82 per cent in June
Insurance claims on various fronts which is an eye opener. 2022 from 47.63 per cent last year, PSU general insurers lost
The CAG audit notes that the PSU insurers failed to carry out the market share from 42.23 per cent to 37.85 per cent.
a proper and timely investigation into the claims settled by
various TPAs. The audit has found that all is not well with the The IRDAI has brought in multiple reforms in order to fix
functioning of the four PSU insurers because of which even issues related to mismanagement of claims. For fixing the
when the health insurance business is the second largest line issue, IRDAI has notified a draft health insurance regulations
of business, all the four PSU insurers have incurred losses. statement where it has been stated that TPAs do not have
the right to reject claims and this will exclusively be the right
The four companies had a gross direct premium of Rs 1,16,551 of the insurance company. TPAs, as recommended, should
crores between 2016 and 2021, yet they incurred losses in only handle cashless claims. Processing of health insurance
the e-health insurance portfolio in all five years between 2016 claims is largely on digital platform both at PSU insurer level
to 2021, with an aggregate loss of all the four PSU insurers as well as TPA level warranting sound IT systems with built in
being Rs 26,264 crores. The CAG report talks about the validation controls, data integration and seamless flow of
malpractices or the irregularities that were going on within data. The IT systems in PSU insurers lacked appropriate
the government companies. Inadequate checks leading to validation checks and controls, undermining the smooth

34 August 2023 The Insurance Times