MORE COVER IRDA bats for FDI in insurance

Mumbai:The insurance regulator has come out strongly in support of increased foreign direct investment (FDI) in the sector. TheInsurance Regulatory and Development Authority (IRDA) has also sought to increase insurance penetration in the country by providing individual companies district responsibilities, similar to the lead scheme in banking. 

    Increasing FDI in insurance from the present level of 26% to the proposed 49% will require an amendment to insurance laws. A bill to amend the act is pending with Parliament. "Good part of the reforms in the insurance sector is tied up with the insurance amendment bill with certain basic structural features of the insurance industry and can be considered when the bill is considered and passed by the parliament," said J Hari Narayan, chairman, IRDA, at an Assocham insurance summit in Mumbai. 
    Speaking in support of higher FDI, Hari Narayan said, "Insurance, like many other sectors in India, requires greater levels of investments and in that regard we would welcome steps to increase FDI in the insurance industry." 
    He added that the authority has provided all the inputs to the government in support of the amendments. 
    According to data from the Life Insurance Council, promoters of lifeinsurance companies have pumped in Rs 31,557 crore over the last decade. If the investment in non-life industry were to be added, the total capital deployed would be above Rs 40,000 crore. 
    Allowing foreign investors pick up an additional 23% is expected to result in multi-billion dollar capital inflows.

Rajan cautions against dependence on FIIs

New Delhi: Cautioning against over-dependence on foreign institutional investors (FIIs), which brings in hot money, chief economic adviser Raghuram Rajan on Tuesday said the government should focus on foreign direct investment (FDI) and open more sectors to such inflows.      "We have to be careful that we are not overtly dependent on external investors … that this is an environment when the external investor is quite fickle," Rajan said in his first media interaction. Betting high on the country's reform initiatives, foreign investors have pumped in more than Rs 9,000 crore (about $1.67 billion) in the country's equity market this month.      "The safest form of financing is through FDI, without any doubt because it's long term... If you can make more financing through FDI, you are safer and so to the extent we can open up more to FDI... There will be efficiency, because there will be more competition in local economy," Rajan said.      In the last couple of days, the government has taken a number of reform initiatives, like opening the multibrand retail chain to FDI, hiking diesel prices by over Rs 5 a litre, capping the number of subsidized LPG cylinders to six per family a year, allowing foreign carriers to pick up stake in domestic airlines and liberalizing FDI rules for broadcasting sector.      Besides, talks are on to increase the FDI cap in insurance sector to 49%, from the existing 26%. "More FDI is a good thing at this point, not in every sector but in many sectors ... So in general there is scope for more FDI in many sector, like insurance," he added.      Rajan also underlined the need for aligning domestic petroleum prices with international rates with a view to reducing subsidies and containing fiscal deficit.  'QE3 to benefit India'  The chief economic adviser also said the US Federal Reserve's latest round of monetary stimulus and monetary easing by the European Central Bank will benefit India in the short term.      The Fed began buying $40 billion a month in mortgagebacked securities this month and has pledged to continue the purchases until the labour market has improved substantially. The programme is called QE3 because it is the Fed's third try at quantitative easing, or buying bonds to stimulate the economy. AGENCIES Raghuram Rajan

IN PRINCIPLE Don’t change N-liability law to suit MNCs

Nuclear power is dangerous and meltdowns are expensive. Nuclear power is so dangerous that the corporations that build nuclear reactors would not do so unless they were protected from the liability of a nuclear accident. As the world has witnessed in Japan, the cost of a nuclear accident far outstrips theinsurance coverage governments have jerry-rigged for the benefit of the nuclear industry. Ultimately, the public is left holding the radioactive bag and billions of dollars in accident clean-up costs.      Without an insurance scheme that shifts liability from the corporation to the public, the nuclear industry would never have split the first atom. After the Fukushima disaster, Vermont Law School Institute for energy and the environment researcher Mark Cooper stated that: "If the owners and operators of nuclear reactors had to face the full liability of a Fukushima-style nuclear accident or go head-to-head with alternatives in a truly competitive marketplace, unfettered by subsidies, no one would have built a nuclear reactor in the past, no one would build one today, and anyone who owns a reactor would exit the nuclear business as quickly as possible."      Cooper found that without such insurance schemes "nuclear power is neither affordable nor worth the risk."      In 2010, India passed the Civil Liability for Nuclear Damage Act. Since then, foreign corporations and the governments that represent them have pressured the Indian government to amend the Act. Unlike other liability regimes adopted by nuclear nations, the Indian law allows those corporations that supply nuclear reactors to be held accountable in the event of a meltdown. The Nuclear Liability Act provides the nuclear plant operator a 'right of recourse' and this has made foreign nuclear corporations nervous.      Nuclear salespersons and statesmen, from Areva's "Atomic Anne" Lauvergeon to US Secretary of State Hillary Rodham Clinton, have lobbied India to amend its Act. And Russia has recently requested that India waive its Nuclear Liability Act for the two Russian reactors being built at the Kudankulam nuclear power plant. It seems American, French and Russian corporations want to sell India billions of dollars worth of new nuclear reactors; they just don't want to be held accountable for the damages their nuclear reactors can cause.      Rather than rewrite the Nuclear Liability Act, the rules implementing it have drastically diluted the liability of the reactor supplier. Fortunately, as the world's largest democracy, India is uniquely situated to defeat and deflect these attempts to water down the law. The parliamentary standing committee has identified inconsistencies between the Act and the rules implementing it and has asked the department of atomic energy to go back to the drawing board and establish rules that are consistent with the intent of the Nuclear Liability Act. This is a step in the right direction and will serve to better protect the lives and livelihoods of Indian citizens.      India's Nuclear Liability Act should not be altered or subverted to benefit Areva, General Electric Hitachi, Westinghouse or Rosatom. These corporations have been coddled by their own domestic and international regimes that channel legal and economic liability for a nuclear accident away from the nuclear supplier and to the owner of nuclear plant. In the Indian context, these are public companies and so the ultimate burden would fall on the tax payer.      But, as is evident after the accident at Fukushima, no nuclear plant owner can withstand the financial tsunami of a nuclear meltdown. TEPCO, the owner of the Fukushima nuclear plant is now bankrupt, virtually a ward of the state. General Electric, the corporation that designed the reactors that melted down and then blew up, turned a $5 billion profit in 2011. Even if the faulty GE designed reactors contributed to Fukushima disaster, Japanese law fails to hold the nuclear vendor accountable.      Fukushima has again shown that splitting atoms to generate electricity is inherently dangerous. If corporations want to sell nuclear reactors, they should be held accountable for the damage their reactor can cause. The Indian Civil Liability for Nuclear Damage Act corrects this glaring omission in international liability regimes. Nuclear power has proven to be more peril than promise and those who would profit from promoting it should be held accountable.      The writer is a nuclear policy analyst for Greenpeace in  Washington DC DANGEROUS LIAISONS Some foreign firms and governments are nervous about India's N-liability law which allows corporations that supply the reactors to be held accountable in the event of a meltdown. The picture above shows an agitation against the proposed N-power plant in Jaitapur

TECH THAT! Now, get social media accounts insured

London: You may soon insure your Facebook and Twitter accounts against the nuisance of hacking as a UK-based company has launched the country's first social media insurance. The information privacy company is offering services to specifically protect against reputational damage, account jacking and ID theft, the Daily Mail reported.      Hacking of users accounts on Facebook, Twitter, LinkedIn and other social media sites are quite common, where another user logs in and posts derogatory or offensive messages, and can cause huge damage to an individual or business's image.      Justin Basini, CEO of the company providing the service, ALLOW, said insurance "perhaps wouldn't have been needed a few years ago".      "That's all changed now. Every internet user faces a certain level of risk that one day a digital criminal will target them or that they will suffer damage to their reputation," Basini said.      The cover, at a cost of £3.99 a month, will pay for legal advice and support if someone suffers an on-line attack and seeks some form of redress. The insurance includes the cost of disabling accounts, suppressing offensive material and stopping any legal action triggered by hacking, for example if a hacker posts illegal material under a victim's name, the paper said.      It is available via the ALLOW Protect service, which also allows users to monitor how their personal data is used on-line, it added. On-line abuse and identify theft are so common that social media users are being sold specialist insurance to help protect their reputation. PTI  Silence please: Smack the mobile to turn it off      Engineers are developing a new technology which would allow you to 'smack' the screen of your mobile and silence its ringing. Microsoft has patented the idea, suggesting it will find its way onto Windows Mobile phones soon. The 'whack-based audio control module' sits at the centre of the phone, and awaits a suitable 'whack', to tell it to be quiet. When your phone rings, it will turn on the 'accelerometer', which tells the phone which direction it is pointing in and can spot sudden movements. PTI

Just The Beginning

The government has signalled its intentions with a slew of reforms, but much remains to be done

Adi Godrej 

The major policy changes on foreign investments and diesel prices announced last week have delighted industry and lifted the spirits of investors. Coming at a time when economic data on industrial activity, export performance and inflation continues to be disappointing, the big bang reforms raise hope that more policy announcements to boost economic growth are to come, and soon.
    To begin with, government hiked diesel prices and restricted subsidised LPG consumption to bridge fiscal deficit which was reaching alarming proportions. In the short term, inflation will go up – but a high fiscal deficit not only adds to inflationary pressures but also pushes up interest rates and constricts available funds for investments. Over the long term, a holistic policy for fuel prices in alignment with shifting global commodity prices needs to be instituted, with better targeting of fuel subsidies to the needy. Electricity charges must also be realistically commensurate with costs. 
    Above all, there is never any right time for disinvestment. A 'systematic' disinvestment plan should be instituted without delay for the PSUs in which stake sale has already been approved by the cabinet, including the four last week. 
    The steps taken for promoting FDI are particularly welcome at a time when slow growth in investments and deferred projects have pulled down the pace of GDP growth. The aviation sector is stressed, and adding FDI could help realise the potential that India's large market offers for its growth. The entry of FDI in multi-brand retail will finally add efficiencies to the supply chain and offer greater returns to farmers and producers, while keeping prices under check for consumers. The stipulations on both multi-brand and single-brand retail FDI are designed to create employment in rural areas, boosting entrepreneurship. 
    Some more policy moves could help build on the upbeat mood. Capital goods production 
    should be encouraged by a 
25% accelerated depreciation on investments in plant and machinery, accompanied by 250% weighted tax deduction for expenditure on 'green' business. There is need to unlock participation of pension funds andinsurance companies in infrastructure projects as well. 
    Reducing interest rates and cutting cash reserve ratio by 100 basis points each are urgently needed measures to add to investments. Flagship government programmes such as Bharat Nirman for infrastructure creation in villages and JNNURM in cities must be boosted. 
    We have estimated that fasttracking 50 high-impact infrastructure projects could rejuvenate some 100 industry sectors up and down the value chain. Hold-ups in project clearance have become endemic in the system, exacerbated by land disputes, clearances, taxation, etc. A board for mediation and alternate dispute resolution could facilitate project implementation. 
    Apart from these reforms, the General Anti Avoidance Rules (GAAR) have created confusion, and the Shome committee report goes a long way in addressing this. Deferring GAAR by three years, amending the definition of commercial substance, grandfathering of tax incentives, distinguishing tax mitigation from tax avoidance, treaty override, excluding GAAR from intra-group transactions, and including the private sector in the approving independent panel, among others, are positive recommendations. 
    Retrospective amendments to income tax law are also avoidable. The impact of these amendments on 82 countries with which India has signed bilateral investment protection treaties needs to be elucidated. The provisions on indirect transfer proposed in the Finance Bill, 2012 require adjustments as well, on the lines of Direct Tax Code. 
    Land acquisition has emerged as a major challenge. The CII has been advocating government intervention in acquiring land for industry. While this was part of the draft legislation, a parliamentary panel has suggested that land should not be acquired by government for private companies, even for public-private partnership infrastructure projects – and also that agricultural land should not be acquired. 
    Such measures, if implemented, could greatly hamper economic development. Moreover, concerns have arisen regarding costs at which land is to be acquired, and for resettlement and rehabilitation, which may turn out to be prohibitive. Deft handling of the land acquisition issue taking into account all sensitivities, particularly inclusive growth compulsions, is required at this stage. 
    The allocation of captive coal blocks has taken centre stage of late. Again, government should desist from cancellation of coal blocks allocated earlier as per due process. Where due process has not been followed, allocations may be reviewed and appropriate action taken. Almost two-fifths of revenue from coal mining goes to the government in the form of royalties and taxes, one of the highest such levels in the world. Thus, delays in production from coal blocks on account of land acquisition, clearances and supportive infrastructure must be resolved through a timebound, single-window mechanism. 
    Finally, the fall in exports has emerged as a concern. The interest subvention scheme available to certain labour intensive exports should also be extended to key sectors such as engineering, automobiles and chemicals, where India is fast emerging as an exporter of note. Moreover, the SEZs created to boost exports are no longer competitive due to withdrawal of various incentives and must be reinstated. A clear and consistent policy for agriculture exports is needed too. 
    The government has signalled its intentions for reform and given the green light. Now it must jump into the driver's seat and fire the cylinders of economic growth. 
    The writer is an industrialist and president, Confederation of Indian Industry.

The spur that the economy so badly needed

City nursing homes to lift ban on cashless mediclaim

After a gap of two years, nursing homes across the city are all set to lift the ban on cashless mediclaim facility through private insurance companies. The move will bring major relief to lakhs of patients who could not avail cashless benefits for undergoing medical procedures.

The Association of Medical Consultants (AMC) is in talks with more than five private insurance companies to work out modalities that are profitable for all parties - patients, health care providers and insurance companies.

AMC president Dr Kishore Adyanthaya said, "Discussions are on with multiple private insurance companies. We want the patients to be benefited at the end." Bajaj Allainz, Future Generali, ICICI Lombard, Star Health and Max Bupa are some of the insurance companies who have met the AMC members. Sources said that a MoU would be signed with one of the companies and other would follow suit.

Nursing homes in the city had banned the cashless mediclaim facility in July 2010 after the concept of Preferred Provider Network (PPN) was introduced by the government-owned insurance companies.

The four public sector insurance companies - New India Assurance, Oriental Insurance, UnitedIndia Insurance and National Insurance - under the PPN programme made a fixed tariff rate card for all medical procedures.

The healthcare providers were upset since the rates were slashed up to 30 per cent for nursing homes and 50 per cent for bigger hospitals.

"The rates were fixed without considering factors like location of the nursing home or hospital, experience of the doctors, severity of the ailments etc. We obviously refused," said AMC's vice-president Dr Sudhir Naik.

Healthcare providers are now confident that the public sector companies will be flexible with the PPN programme. "Till now, the consumer was bearing the brunt of the tussle between the healthcare providers and insurance companies. However now the consumer is more powerful with the insurance portability option," said Naik.

The insurance companies were of a view that healthcare providers have been charging 'enormously' to insured patients. While the healthcare providers have been denying this, the AMC is now working on a concept called Network of AMC Hospitals (NOAH) which will guarantee transparency is medical treatment and billing as well.

State plans policy for senior citizens

Mumbai: Thirteen years after the Centre framed one, the state will prepare a policy for senior citizens, the aim of which is to makecertain that"society takes responsibility of its senior citizens, ensure them financial security, access to health care and housing andenablethem tolead adignifiedlife". 
    The government's move is notsurprising, given thefactthat according tothe2011census,1 crore people of its 11 crore population are above 60 years. Of them,47% are men and53%women.In rural areas,50%women in this age group arewidows. 
    The draft policy said, people attaining 60 yearswillbeconsidered "senior citizens", who will be further classified. Those between 60 and69,willbe given the tag of "capable of working", those between 70 and 80 "elderly" andthose above"very old". 
    Minister of state for social justice Sachin Ahir, who has been holding meetingsfor framing the policy, said the government would make it mandatory for all families to have non-slippery tilesin bathrooms andfix a rod on the wall to help elderly people keep balance. In all new constructions, builders will have to construct a separate bathroom for senior citizens. Besides, elderly people will be provided with a health card under Rajiv Gandhi Jeevandayi Yojana, free or subsidized travel on public transport and discounts on stay at MTDC resorts. The government also plans to direct buses to have low footboards; theatres will also have 10 seats —in two front rows and last two rows—reservedfor them. 
    Sheilu Sreenivasan, founder of NGO Dignity Foundation, saidtoimplementthe policy,the existing schemeswillhavetobe evolved. "Without schemes to help senior citizens access government aid, the policy will not besuccessful,"shesaid."Itis good that the Maharashtra governmentisdoing this,butby the timeitisimplemented,theCentre's new policy mightbeout." Earlier Act not yet implemented T he government is ready to draft a new policy for senior citizens but it is yet to implement the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 though it framed rules in 2010. It even appointed 112 sub-divisional officers to head tribunals. The social justice department said the tribunal could not function in the absence of a panel of eminent citizens to assist the SDOs. "An SDO usually refers a case to the panel that tries to reach a settlement. When that fails, the SDO conducts a hearing and gives a verdict," said an official. TNN

Govt plans new vehicle taxes to clear roads

New Delhi: The government plans to levy a one-time additional "urban transport tax" on private vehicles to discourage their use in cities and towns that have been contending with the growing rise of four-wheelers over the past few years. In addition, in the next five years, the Union urban development ministry is looking to introduce "congestion pricing" — popularly known as congestion tax — in cities and towns.      These proposals have been incorporated in the targets set for the ministry during 12th five-year Plan. On Saturday, a meeting will be held to discuss the plan for all ministries.      The central proposal says the urban transport tax can be collected throughinsurance companies for existing vehicles. For new vehicles, the tax can be collected at the time of registration.      Urban areas have the maximum concentration of private vehicles. Transport experts say mega cities have at least 10% share of total vehicles, of which 90% are privately owned. The government expects the measures to force people to shift to public transport, and it would have a direct impact on the country's crude oil import and reduction in vehicular pollution in urban centres.      Earlier this year, the urban development ministry had proposed issuing an elaborate advisory to states on how to levy congestion tax in cities. The tax is applied only in restricted areas such as central business districts like Connaught Place in New Delhi where traffic flow is high.      Sources said the ministry is also considering provisions of incentives and penalties for states for stricter enforcement. The pricing of congestion tax would be decided by state governments.      Considering that such initiatives would work only when there is adequate and efficient public transport system, the government proposes to set up a National Urban Rail Transit Authority, which would plan and design Mass Rapid Transit Systems for all urban centres, over the next five years.  Times View: Need to develop public infra I n a world threatened by emissions leading to global warming, the general principle of encouraging the use of public transport and correspondingly discouraging private vehicles makes sense. You could also argue, as many do, that the best way of doing this is through fiscal incentives and disincentives rather than outright bans. However, if this principle is to work on the ground, it must be accompanied by the development of a public transport infrastructure that is genuinely good and adequate. Unfortunately, that is far from being the case in India. To talk of a tax on private vehicles without creating such public transport facilities amounts to putting the cart before the horse.

‘FDI in insurance, retail to create lakhs of jobs’

Mercer Chief Says India Will See Growth

Mumbai: Opening up retail and insurance sectors will generate lakhs of additional jobs in India, global human resource consultancy Mercer has said. According to the firm, labour statistics continue to be positive in the country, although not as positive as a year and a half ago. 
    Speaking to TOI, Mercer's newly appointed growth markets head Gaurav Garg said, "If retail foreign direct investment gets through, it will start a whole new industry and generate huge employment and bring in investments without eating into anyone's share. The domino effect will be such that it will create lakhs of ancillary jobs from rural employment to jobs in cold chains and transportation," he said. 
    Similarly in insurance, the passage of the bill amending the act would result in new companies setting up shop. "The insurance amendment bill also allows foreign reinsurers to start operations here. This will again result in the creation of a new industry," he said. 
    Garg, who has taken charge as region leader, growth markets, incorporating Mercer's businesses in Asia, Middle East, Africa and Latin America — where Mercer has operations in 20 countries at present — said that India continued to be seen as a high growth market in terms of jobs. 
    "India has this huge demographic advantage, which will result in a lot of investments coming in. Although growth in India is less than what was expected, a 7% growth would be still better than most other markets," he said. 
    In India, the hiring is expected to be industry specific. In sectors such as life insurance, some of the large companies have reduced staff but generalinsurance industry is bouncing back into profitability and is expanding. Similarly, in telecom, the established players are still trying to grow market share. "Going ahead, the challenge for companies will be, how to keep young employees motivated, as the choices before them will only increase," he said.

Retail FDI's domino effect will create lakhs of ancillary jobs from rural (areas) to jobs in cold chains & transport 
Gaurav Garg 
| GROWTH MKTS HEAD, MERCER

Deluge victim wins 4 lakh Insurance Claim for car

. Mumbai: Seven years after the July 26 deluge, a consumer forum ordered the New India Insurance Co Ltd to pay a Juhu resident Rs 3.84 lakh he had claimed after his car was "severely damaged due to the flood waters". The company will also pay the complainant A B Gupta Rs 10,000 as costs of the complaint.      A B Gupta owned a Honda City, which was insured with the company. However, the vehicle suffered severe damages in the 2005 deluge and Gupta filed an insurance claim and sought Rs 5.16 lakh in damages. However, theinsurance company only sent Gupta a cheque of Rs 1.98 lakh he refused to accept it. At a later date, the firm sent him Rs 3.76 lakh through its agent. Gupta did not accept this and stated that the amount due to him was Rs 3.84 lakh.      In March 2007, Gupta sent a legal notice to the company and sought the amount with 18 % interest. However, the insurance refused. The company then said since it had made an error in calculation the amount payable was only Rs 3.28 lakh. An aggrieved Gupta filed a complaint with the forum on March 13, 2008.      The firm filed its response and said according to the estimations presented by the surveyor it was liable to pay only Rs 1.98 lakh. The company also alleged that a senior surveyor was later appointed by them and he pegged the damage at Rs 3.84 lakh. It stated that the repairs for the car had cost Gupta Rs 5.16 lakh.      However, since Gupta had got a discount at the service centre, he only paid Rs 3.76 lakh and this was the amount the firm had then agreed to pay him. However, the forum held that the insurance company could not keep "accepting and rejecting the survey report according to its own will". The forum held the company guilty of deficiency of service.

Buy a fixed benefit health plan only as a supplement

It should be taken only to enhance a mediclaim policy since it covers incidental expenses as opposed to the hospitalisation and treatment expenses offered by the indemnity plan.

    The introduction of health insurance portability has done away with the dilemma of choosing an insurer. If the service is not up to the mark or the premium is too high, you can switch to another company. However, buyers are now faced with a new confusion. Should they go for an indemnity plan, which will reimburse their hospitalisation expenses, or should they buy a policy that pays a fixed sum irrespective of the expenses? 
    Experts say the dilemma is unwarranted because a mediclaim policy and a fixed benefit plan are completely different in terms of the coverage they offer. The indemnity or mediclaim policy covers the expenses incurred on hospitalisation and treatment, while a defined benefit plan is meant to cover incidental expenses and loss of income due to hospitalisation. "Both have their own uses and should complement each other," says Mahavir Chopra, head of online and retail initiatives, at Medimanage Insurance Broking. 
    In the past few months, several insurers have launched defined benefit plans. Unlike indemnity plans, these policies don't place limits on claims. In most indemnity plans, there are sub-limits on the amount that can be claimed under various heads. For instance, many plans cap the claim on daily room rent to 1% of the sum assured. Many are not paid in full because the sub-limit on a particular head has been exhausted. 
    "Our research shows that the key concerns among policyholders are getting the full claim amount, increase in premiums in case of a claim, and worries over coverage of all surgeries," says Rajeev Jamkhedkar, managing director and CEO of Aegon Religare Life Insurance. Last month, the company launched its iHealth fixed benefit plan, which gives a per day cash allowance in case of hospitalisation and makes a lump-sum payment in case of surgery. A premium of about 12,000 a year can get a family of four (husband 35, wife 30 and two children aged 5 and 3) a cover of 3,000 for every day of hospitalisation and 3 lakh in case of surgery. "The cover is not a floater to be shared by the entire family, but for each individual. This means the combined insurance cover works out to 12,000 a day and 12 lakh for surgeries," says Jamkhedkar. 
Insufficient coverage 
However, keep in mind that the policy will pay a lump sum only in case of surgery. Diagnostics, doctor's fee, room rent and medicines are not covered. Most cases of hospitalisation do not require surgery (see graphic). Many infections and common ailments, such as gastroenteritis, malaria, dengue and hepatitis, have to be treated medically. Most cases of injuries also don't need surgery. In such cases, the iHealth fixed benefit plan will pay only the daily cash component of 3,000-5,000 depending on the plan opted for. 
    Some fixed benefit plans, such as the Wellsurance plan from Tata AIG General Insurance, have a broader coverage. "Our policy offers comprehensive coverage for hospitalisation, which not only includes the room rent and ICU charges, but also nursing expenses, investigations like X-ray, MRI, CT scan and physiotherapy," says Gaurav Garg, managing director & CEO, Tata AIG General Insurance. For about 12,000, a family of four gets covered for 3 lakh against more than a dozen critical illnesses, as well as daily hospital cash, ICU charges and even 2,500 convalescence benefit for five days after discharge from the hospital. However, unlike the iHealth plan from Aegon Religare, surgeries are not covered unless they relate to the critical illnesses specified under the Wellassurance health plan. 
    This also means that a fixed benefit plan should not be seen as a replacement for a plain mediclaim policy, which should be the base of your health insurance coverage. "We strongly recommend that a person go for an indemnity plan as well as a defined benefit plan," says Antony Jacob, CEO of Apollo Munich Health Insurance. 
Who should buy? 
A fixed benefit plan suits people who want to enhance their existing health cover. Software professional Rajesh Prasad and his 
    lecturer wife, Anjali, (see picture) have medical covers from their employers and have also bought the LIC Jeevan Arogya fixed benefit health plan. "Often, policyholders are unable to claim medical expenses that are not related to hospitalisation. A fixed benefit plan comes in handy in such 
    cases," says Jacob of Apollo Munich. His company offers both indemnity covers as well as fixed benefit plans. 
    Fixed benefit plans are a must for people who can suffer loss of income due to hospitalisation. Most salaried people get paid medical leave, but if your company does not offer this benefit, a fixed benefit plan comes to the rescue. Self-employed professionals must also consider these plans. It is important to note that a policyholder can make a claim under a fixed benefit plan over and above his claim in an indemnity policy. This also means a deeper scrutiny of claims because the policyholder will actually benefit for every day he stays in the hospital. Experts warn against the temptation to defraud which can lead to rejection of claim by the insurance company.

Rajesh Prasad, 35 and Anjali, 33, Bangalore 
Bought a fixed benefit LIC Jeevan Arogya plan for the entire family because both already have covers from their employers.

Many Insurance Cases Turned Down after SC Verdict

Consumer forums reject pleas if cases don't start within 2 years of a dispute

Consumer Disputes Redressal Forums are rejecting many insurance-related cases after a recent Supreme Court Judgment on time-barred claims. "Almost 70% of insurance cases in the Maharashtra Commission have been rejected after the Supreme Court's verdict," said Sudhir Gudhal, director, Magus Corporate Advisor, a firm that assists corporates manage claims. "The judgment is being used to reject even fair cases." 
The judgment, in the Kandimalla Raghavaiah & Co, a tobacco firm in Andhra Pradesh, vs National Insurance Company case, said legal proceedings in consumer cases should start within two years of a dispute arising. 
Consumer forums, the platform preferred over civil courts for quickly settling low-ticket-size claim disputes, many related to insurance and banking, are also turning most cases away as they struggle to dispose of those that have already piled up due to increasing awareness among consumers about their rights. 
"Consumer forums (councils) are turning away aggrieved consumers emptyhanded by not entertaining their cases due to the lengthy documents involved," says Geetanjali Dutta, an independent lawyer who deals in consumer disputes. 
Generally, consumer protection forums, or consumer courts, established under the Consumer Protection Act of 1986, deal with cases more expeditiously than civil courts, where the need for trials drag cases and burden aggrieved consumers with huge legal expenses that could go up to . 4 lakh. 
There are forums at the district level (Consumer Disputes Redressal Forum), at the state level (State Consumer Protection Council, or state commission) and at the national level (Central Consumer Protection Council, or national commission). 
"It's mostly mediclaim disputes from the insurance segment that consumer forums mostly deal with," says Tapan Dutta, chairman, Bombay Suburban Consumers Association. "Many insurance 
companies 
deny things they have promised," he says. "Even in the consumer forums, many a time they ask for documents or details that are irrelevant, making the (disputeredressal) process lengthier and costly for middle-class people." 
Irda guidelines suggest cases should be settled in six months, but companies take 12-18 months to settle them. The irony is that a consumer court takes 3-6 years to settle a case, while civil courts take 10-12 years to settle a claim. There is also a glut of cases related to banking, automobile, and electricity. 
There are currently 10,062 cases pending with the National Commission, 95,800 with State Commission and 2.48 lakh with the district forums. 

Insurer goes to court over 5L compensation, pays 11L

Chennai: What does the right hand mean to a hairdresser? And, when a motor accident claims tribunal awards Rs 5 lakh as compensation to a hairdresser for loss of a hand, is the insurance company justified in questioning the quantum of the compensation? 

    These were the issues before the Madras HC which heard an appeal by the staterun National Insurance Company. It had moved the HC saying a compensation of Rs 5.25 lakh, awarded to a hairdresser who lost his right hand while travelling in abus, was exorbitant. 
    Taking exception to the plea, the HC enhanced the compensation to Rs 11 lakh, payable along with interest. Justice S Vimala, dismissing the petition , said, "The importance of right hand in hair cutting profession is selfexplanatory. The claimant being a hair dresser, the loss of his right hand means total isability. The injury was such that the claimant had been disabled from all work he was capable of performing."