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With effect from August 1, Insurance has been made mandatory for all Emigration Check Required (ECR) category passport holders who seek jobs in 18 countries which have been notified by India.

According to the Ministry of External Affairs notification, every Indian applying for emigration clearance from the concerned Protector of Emigrants (PoE) should obtain an insurance policy for a minimum period of two or three years and should be covered for a sum of Rs 10 lakh in the event of accidental death or permanent disability leading to loss of employment while working abroad. Insurance will be valid irrespective of change of employer or the insured worker’s location during the policy period. It’ll also remain valid during the person’s visit to India or any third country.

This move by the MEA through the Pravasi Bharatiya Bima Yojana 2017 scheme, will benefit nearly 70% of blue-collared workers proceeding for overseas employment. Most of the blue-collared workers going abroad do not opt for insurance and it’s only when something goes wrong they realize it’s important.The mandatory insurance cover will also help create a database of ECR workers abroad.

To ensure the financial stability of the PSU general insurers, government has ordered for the strict adherence to the prudent underwriting practices.

The Department of Financial Services under the Ministry of Finance sent a letter to the heads of all Public Sector Unit (PSU) general insurers on 28 June 2017 in this regard. The letter said: “To ensure that unhealthy underwriting practices in these companies do not cause unnecessary financial strain on their financial stability, it is desirable that prudent underwriting practices suggested in government advisories are followed strictly.”

A senior official of the Financial Services Department has confirmed by stating “It is true that we have noticed the gross misuse of underwriting rates in almost all general insurance firms in India. So, we have decided to take prompt and corrective action against those wrongdoings in the interest of customers/policy holders in this matter. We have also asked the Chairmen and Managing Directors of all PSU general insurers to kindly note the concern and strictly focus on prudence in underwriting.”

This move from the government is due to the fact that even after 17 years of liberalisation, the insurance industry continues to register huge underwriting losses every year, and it is an investment income which drives the growth of the industry.

IRDA allowed health insurance portability in July 2011.

Since then the number of health policies which have been ported is considerably small. As per the industry data only 1 lakh health policies in the financial year ended March 2017. The major proportion of such policies is of PSU insurers which were ported to private companies.

People want to port their policies for a number of reasons. One, they may have faced difficulties in the processing of the claim, they may not be happy with the features of their existing product or New products have come into the market that offer additional benefits.

Conversely, one of the main reasons for the low portability rate is that customers normally realize the need to port after a claim is made. Given that most claims are made because of lifestyle ailments, the new insurers approached may refuse to accept the policies offered because of the policyholders’ existing health conditions. Another reason is that agents are not remunerated for referring policyholders who wish to switch insurers.

As insurance experts we advice our clients to be aware of the product and its terms and conditions where he/she is interested in porting the policy. One needs to check the applicable waiting periods for coverage of pre-existing ailments, specific ailments, general exclusions, any co-pay /sublimates for ailment/ deductible applicable, in the new product before porting the policy.

The Union road transport ministry along national highways connecting Gurgaon to Jaipur, Mumbai to Vadodara, and Ranchi to Mahaulia launched cashless health insurance scheme for injuries on highways to address financial woes that over a third of road-trauma victims in India face from the treatment costs.

Shankar Prinja, associate professor in health economics at the Postgraduate Institute of Medical Education and Research, Chandigarh, who led the team that evaluated this scheme by doing a three-hospital study at the George Institute for Global Health, New Delhi by tracking 2,200 road accident victims found that without insurance, such victims or their households spend on average Rs 25,000 on treatment during the first month after the accident, while the average spending crosses Rs 65,000 in the subsequent months.

The cashless insurance plan on the highways has made a difference. Even when victims had to pay for treatment, the analysis found significant differences in the out-of-pocket, or personal, expenditures on treatment between the victims covered by the scheme and those out of it. Patients with the most severe levels of injuries covered by the cashless scheme had an average personal expenditure of Rs 8,500 compared to the Rs 25,000 by those with comparable injuries not covered by the plan. The scheme, whose premium is paid by the Centre, provided free treatment of up to Rs 30,000 to road accident victims in government-empanelled hospitals easily accessible from the three segments of national highways.

Basis the strong evidence of financial risk protection with the cashless plan, Shankar Prinja and his team have recommended expanding the scheme to cover highways across the country.

In 2000, the private companies were allowed in insurance sector and at present there are 31 general insurance companies in the private sector. There are four state owned companies, viz. New India Assurance, United India Insurance, Oriental Insurance and National Insurance.

For the first time in over one and half decade privately held general insurers have overtaken state owned insurers in market share in April. Private insurers captured 51.63% of the general insurance market and the public sector managed 48.37% in April as reported by Press Trust of India.

In terms of gross written premium (GWP), general insurance industry grew by 16 per cent to Rs.12,206 crores on April 30, 2017. In April, the four government owned general insurers saw their GWP grow by 5.42% to Rs.5,904 crores while the private sector expanded GWP by 27.88% to Rs.6,302 crores, according to data available with Insurance Regulatory and Development Authority of India (IRDAI).

Also, the market share in PSU general insurers is showing a declining trend from the last three years. The market share of PSU insurers come down from 55.09 per cent in FY15 to 53.21 per cent in FY 17 whereas growth in private players rose from 44.91 per cent FY15 to 46.79 per cent in FY17.

The growth in the industry for the fiscal year2017 has been mainly due to increase in crop insurance segment where the private players have shown an increase of more than Rs.400 crores, compared to the insignificant growth for government owned insurers.

Full form of GST is Goods and Services Tax. It is an indirect tax reform which aims to remove tax barriers between states and create a single market.GST will unify all the Central and State taxes into a single tax and would eliminate the surging tax effect or double taxation on sale of goods and services.

Even as 95 per cent of women are aware of health and fitness, only 74 per cent go for a checkup when they are unwell, according to a recent survey. However, when it comes to health insurance, women are on top of their game — 47 per cent have medical insurance, 65 per cent said they were fully aware of insurance, and 77 per cent said they knew how to submit a claim, according to a survey – Women Health and Insurance.

The Mental Healthcare Bill’ has been passed in Apr’2017 in the Lok Sabha and it decriminalizes suicide attempt by mentally ill people and provides services for people with mental illness.

It also includes a clause which obligates insurers to make provision for medical insurance for treatment of mental illness on the same basis as is available for treatment of physical illness. Currently, health insurance plans in India do not provide coverage for mental health disorders.

As per National Mental Health Survey of India 2015-16, 1 in 20 people in India suffer from depression.

The study showed that on an average out of -pocket expenditure per month was approximately 1000 to 1500 rupees and qualitative interviews revealed that this is a big challenge. In the absence of state or insurance coverage for most families, a large proportion of payments for treatment are out-of-pocket expenses.

The introduction of mental health insurance will help in promotion of mental health literacy among the population. This would also reduce the stigma around the mental illness and enable the people to perceive it same as physical ailments.

Almost all insurance policies will be issued in electronic form with effect from 1 October this year, with insurance buyers required to have an e-insurance account (eIA) to buy or renew policies thence.

Most policies, including all motor insurance and overseas travel insurance policies, will only be purchasable in electronic form after September. From filling up the application form to making payments online to the issuance of the policy document, the entire process of buying insurance could soon be paperless. Maintaining and managing policy documents or records across multiple companies will also be done away with, as the policyholder will have access to a single-view platform. “More importantly, customers will no longer be vulnerable to being cheated by fraudsters fabricating and forging policies since digital policies will be authentic,” Mr Easwara Narayanan, Chief Operating Officer, Future Generali India Insurance told The Economic Times.

However, Mr S V Ramanan, CEO, CAMS Repository Services, said: “The response to the e-insurance account has been lukewarm so far. The reason being it’s still not well known in the market. The policyholder trusts the recommendation of the sales person or the insurer, and this hasn’t been their priority at the moment.” Customers will have to open an eIA with any insurance repository to hold the insurance policies in electronic form. Currently, there are five insurance repositories in India. Mr Nilesh Parmar, COO, Edelweiss Tokio Life, said: “In the immediate term, we do see some disruption on account of the mandatory issuance of e-insurance policies for all online customers. Convincing customers of the need to open an eIA account and the actual process of opening this account for the vast majority of customers who don’t have this account yet could lead to some challenges.”

Furthermore, there are still large areas of the country where this may not be possible. Mr Anil Chopra, Group CEO & Director, Bajaj Capital, said: “The extension of this (electronic policies) to small cities and villages and to the policyholders who are not Internet-savvy is challenging.” Mr Narayanan also said: “Companies may have to organise digital signatures, apart from initiating arrangements with repositories for opening electronic insurance accounts. These are not major challenges.”

The process of listing of four public sector general insurance companies will be carried out one by one and a “lot of action” is expected in this arena shortly, a top official has said.

“Modalities are being worked out and I think we should see lots of action on that front in the next few months,” Economic Affairs Secretary Shaktikanta Das said. He was speaking at a business summit, according to the Press Trust of India. In the Budget presented last February, the government announced that the four public-sector general insurance companies would be listed. They are New India Assurance Company, National Insurance Company, Oriental Insurance Company, United India Insurance Company.

Several private-sector insurers are also considering obtaining a listing, either directly or indirectly. Ahead of insurance IPO exercises, IRDAI last week released draft guidelines for listed insurance companies. As of now, no insurer is listed in India.