Page 10 - The Insurance Times November 2024

corporate requirements of Ind As 117,
he said. Outstanding Premiums of Hundreds of Crores from
State Government, Reports United India Insurance
But it is imperative that the regulator
gives industry a date from when the Days after the Maharashtra government cancelled the execution of the
Ind AS117 will be implemented, Chopra state's flagship health insurance scheme - Mahatma Jyotiba Phule Jan Arogya
said. Yojana (MJPJAY)- United India Insurance Company Ltd ( UIICL) refuted the
claim of the state government that the company was delaying the payment
"To me, it is surprising that in various
other auditing and accounting mat- to hospitals. The company said that "there is outstanding premium of hun-
ters, regulators keep insisting on the dreds of crores from December 2022 onwards" due from the government.
need for international standards to be The decision to cancel the contract unilaterally without any notice under-
implemented. But with respect to in- mines the spirit of the MOU and against the principles of natural justice,
surance companies, it takes a UIICL said. The claims under policy become payable only when the premi-
backseat", Chopra told. ums due are fully paid, it said. "These delays stemmed largely from the non-
payment of premiums by SHAS (State Health Assurance Society), an issue
Maharashtra Government we raised multiple times," the state- owned insurer said. The Indian Express
reported about the cancellation of the contract on September 19.
Cancels Rs. 3000 Crore In-
On the contention of SHAS that UIICL was to pay Rs 93 crore performance
surance Contract with bank guarantee which they did not pay, United India said, "We have com-
United India Insurance municated to SHAS to deduct 3 per cent of the performance guarantee from
the premium payable to us as was done in the previous MOU. However,
The Maharashtra government has ter-
SHAS could not do so as they did not remit the premium due on June 30,
minated the Rs 3,000 crore contract 2024 till date. We have also agreed to provide a Bank Guarantee if SHAS
with Chennai based public sector remits the premium. In the absence of premium, the MOU itself is null and
United India Insurance ( UII) for imple-
void and question of performance guarantee does not arise."
menting the state's flagship health in-
surance scheme - the integrated Ma-
hatma Jyotiba Phule Jan Arogya Yojana Chavan added that the government Rs 1,300 per family for an estimated
(MJPJAY) - citing "unsatisfactory re- held around two to three meetings 2.38 crore families with a total popu-
sponse" from the insurer. with the higher leadership of the com- lation of 12.3 crore. The total insur-
pany but the performance did not im- ance premium was over Rs 3,000 crore,
Instead, the state government is likely
prove. "We finally had to take action," which was to be paid to UII. The fam-
to implement the universal health cov-
he said. ily coverage was increased from Rs 1.5
erage on its own without involving any
insurers. The Central government con- UII had won a fresh mandate from the lakh to Rs 5 lakh.
tributes around 60 per cent of the pre- state for implementing MJPJAY 2.0 UII was to cover up to Rs 1.5 lakh per
mium while the balance is paid by the (with universal health coverage) in family and the rest was to be managed
State. June and the cover was in force since by the state agency State Health As-
July this year. surance Society (SHAS). However, the
Ramesh Chavan, CEO, Mahatma Phule state government hasn't paid any pre-
Jan Aarogya Yojana, said that the con- While the scheme was profitable for mium till now and, instead, preferred
tract was terminated because of un- UII in the first year, it had refunded Rs to cancel the contact with the insurer
satisfactory response from the insur- 265 crore surplus to the state govern- without giving any reasons or notice
ance company. "After we signed the ment. There was no profit and no loss last week, an insurance official alleged.
contract in June, the company was to in the second year, but in the subse-
pay Rs 93 crore performance bank quent two years, the scheme was a
guarantee which they did not pay. lossmaking one for the insurer. This National Insurance Co.
could be one reason for the insurer to
Additionally due to increase in claim Identifies Assets for Sale
amount last year, the company was show an unsatisfactory response, ac-
delaying the payment and we started cording to official sources. Amid Solvency Challenges
receiving a number of complaints from Under the new universal health cover- National Insurance Company, which is
the hospital," he said. age, the state finalised a premium of grappling with a severe solvency short-

The Insurance Times November 2024 9