IBA Medical Insurance Scheme

[Prasad C N]

Dear friends,

We have seen many messages in social media including this group that IBA Medical Insurance premium is exorbitantly high and unaffordable.  Some have even stated that the premium is high on account of brokerage, etc. 

There is no dispute that the premium is exorbitantly high and unaffordable.  From the utility of Insurance angle, higher premium means insured have utilized the policy to that extent and the policy has become useful to those who have claimed and got money.  If the Claim ratio is over 100% means, for every Rupee of premium collected, outgo is more than that Rupee.  If the claim ratio is 147% means, the Insurance Company has paid claims to the extent of 1.47 times of premium received by the company.  Who has to be blamed for higher premium ? 

Please go through premiums payable over a period of time.  The premium were far lower during earlier years and suddenly increased.  It is because IBA dispensed with services of the Brokers.  This is on account of a complaint to Central Vigilance Commission regarding acts of omission and commission with regard to engagement of brokers.  Some crusaders and warriors complained.  Thereafter, Indian Banks Association floats RFQs (Request for Quotations).   IBA is opting for lowest quote received. 

Having hands on experience of about 20 years in Insurance Industry and also having worked for two Insurance Brokers, I am aware that the maximum brokerage paid by the Insurance Companies is around 2% to 3% in respect of big ticket policies.  Brokers certainly help in reducing the premium, far more than the Brokerage they receive.  The SBI has engaged a Broker and all can see how premium is kept lower.      Indian Banks Association dispensed with engagement of Broker, because they do not want to listen to accusations.  Even constituents of United Forum of Bank Unions have distanced themselves, because they do not want be accused.   Without knowledge and information, we accuse everybody else. We need to understand the damages caused by jasoojis, crusaders and warriors.  I am also aware that many would accuse me also.  It does not matter.

Many individuals and organisations are quoting the communication from the Government of India regarding revision of limits of Staff Welfare Fund in the year 2012.  Following is extracted from Circular No. F.No.14/7/92 –IR (Vol-II) dated 24.02.2012 regarding revision in limits for Staff Welfare Fund allocation :

2. It is further stipulated, that :

(i)                 No cash payments shall be made to employees except for medical and educational purposes.

(ii)              Banks may consider the option of Group Insurance Policies for both serving and retired employees instead of direct payment of benefit from the Fund.

 3. Each year the Banks may devise a Scheme for apportionment of funds with the prior approval of their Board of Directors, as per specific needs of the Bank.

 Now, questions based on the above extracts are :

 a.       Whether the Medical Insurance provided to employees is out of  Staff Welfare Scheme or in lieu of Medical Benefit available to employees, earlier ?  (State Bank of India still continues with old scheme, without Medical Insurance) ;

b.      What is the quantum of Medical Insurance premium payable in respect of employees is out of Staff Welfare Fund ?

c.       Whether above communication stipulates introduction of Medical Insurance Scheme for employees, as it is available, now ?  If so, how can the amount of outgo out of Staff Welfare Fund accommodate quantum of premium paid by the Bank, which is several times of the ceiling ?

Those IAS Officers and Senior Government Officials who read such communications from Bank Retirees and their Orgainsations, would certainly wonder, how these gentlemen have worked in the Bank. 

It is an earnest appeal.  Before, we comment please do home work, Bank retirees have plenty of time to spend in learning.  We must be able to prove authenticity and correctness of every word or letter which are uttered.  We must stop concluding based on what some jasoojis, crusaders and warriors.  It is unfortunate that we believe them or any one who says so.

Thanks, a Million. 

With regards,

Prasad C N

[M A Prasad]

My humble opinion (which several times in this forum and in social media I have stated - as long the group insurance contain only high age group or high risk group, the premium is bound to be high. I do not whose interest is served by keeping this group separate. Ideal to have one large group where employees are also part of the group - of course bank can bear premium for employees and for retired employees premium to be borne by ex-employees 

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[ravikan...@gmail.com]

It can’t be denied the comments, analysis and evolution of the scheme is in line with the individual’s persuasion of life, mentality, interpretation, individuality, involvement and social understand.  I feel there is no need for any to surprise, astonish and de-value other on account only they are in advantage position at present. Other persons will also court them likewise after they loose their advantageous position. If possible one should endeavour to extend extend some help or assistance or else they should keep their permanent advantageous position of spectatorship. 

In this case one thing is pertinent that the insurance company for the sake higher profits using business tricks cleverly and showing a different picture to the world. The scheme analysis should be made by including both the in-service and retired staff. However paying the premium does not matter to the insurance company.  It is only one IBA initiated group insurance scheme. But the insurance company is separating the health insurance of retired staff separately and the misfortune is the world is blindly accepting it.  

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[Purushothama N]

Very well explained. Thanks for the same.

[JSOMA SHEKARA]

The Government will not give GST exemption. Insurance Co will not reduce premium. Banks will not share premium cost.

This scheme is not for all  and only for those who are rich and can afford premium. 

For others there is no other option but to opt out of the scheme.

Banks, IBA, UFBU and Govt nobody will bother about retirees.

Retiree associations are now defending the scheme.

Better we stop discussion on Medical Insurance and concentrate on updation.

No solution can be found by this discussion.

[bhaskara sarma]

Yes,it is true.This hue and cry for reduction of premium, waiver of GST,subsidy on premium became an annual ritual.

With regards,

P Bhaskara Sarma.

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[Ravindra Kohli]

Dear Sh JSOMA SHEKARA JI, 

                   Very well said. Nothing to do, simply to opt out the scheme.

Regards 

Ravindra Kohli

PNBEVRS 2000

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[Anantha Narayanan]

absolutely  correct, This scheme is only  for the  rich  and  not  for  the  poor/ poorest  sections of the  society

=Ananatha narayanan

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