Page 26 - Insurance Times January 2023

Health Insurance

Claims

Mismanagement

Jagendra Kumar
Ex. CEO,
Pearl Insurance Brokers

The audit has found that all is not well with the functioning of the four PSU insurers because of
which even when the health insurance business is the second largest line of business, all the four
PSU insurers have incurred losses.

ut of the 32 general insurance companies which companies. Inadequate checks leading to multiple claim
O do health insurance business in India, there are settlements, excess payment over sum insured, and
only four public sector general insurance
breaching of capping limit for specific diseases are some of
companies: The New India Assurance Company
Limited (NIACL), United India Insurance Company Limited the lapses by four public sector insurers that the Comptroller
and Auditor General of India (CAG) has flagged in its report.
(UIICL), The Oriental Insurance Company Limited (OICL) and
National Insurance Company Limited (NICL). The Comptroller The gross underperformance and multiple irregularities have
and Auditor General (CAG), during its audit of the four PSU made India's four PSU general insurers lose out to private
insurance companies found mismanagement of Health players. This is evident from the June quarter results of the
Insurance claims on various fronts which is an eye opener. companies. Even when the market share of the private
The CAG audit notes that the PSU insurers failed to carry out companies rose to 51.82 per cent in June 2022 from 47.63
a proper and timely investigation into the claims settled by per cent last year, PSU general insurers lost the market share
various TPAs. from 42.23 per cent to 37.85 per cent.

The audit has found that all is not well with the functioning of The IRDAI has brought in multiple reforms in order to fix
the four PSU insurers because of which even when the health issues related to mismanagement of claims. For fixing the
insurance business is the second largest line of business, all issue, IRDAI has notified a draft health insurance regulations
the four PSU insurers have incurred losses. The four statement where it has been stated that TPAs do not have
companies had a gross direct premium of Rs 1,16,551crores the right to reject claims and this will exclusively be the right
between 2016 and 2021, yet they incurred losses in the e- of the insurance company. TPAs, as recommended, should
health insurance portfolio in all five years between 2016 to only handle cashless claims. Processing of health insurance
2021, with an aggregate loss of all the four PSU insurers being claims is largely on digital platform both at PSU insurer level
Rs 26,264 crores. The CAG report talks about the malpractices as well as TPA level warranting sound IT systems with built in
or the irregularities that were going on within the government validation controls, data integration and seamless flow of

22 January 2023 The Insurance Times