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Daily Equity - Health Insurance Claims Face Massive Rejection: A Deep Dive into FY23-24

Health Insurance Claims Face Massive Rejection: A Deep Dive into FY23-24

In the fiscal year 2023-24, health insurance companies in India rejected claims worth INR 26,037.65 Crore. Specific companies like Care Health Insurance, ICICI Lombard, and Niva Bupa have drawn complaints. IRDAI in radar to implement prevention measures to unfair practices. The Union government has revealed that insurance companies in India rejected claims worth a staggering ₹26,037.65 crore in the financial year 2023-24 (FY23-24). This includes claims of ₹15,100.14 crore that were disallowed as per the terms and conditions (T&C) of the policies and ₹10,937.17 crore repudiated by health insurance companies. The data was shared in response to a question in the Lok Sabha by Pankaj Chaudhary, the Union Minister of State for Finance. Public Sector Insurers Lead in Claim Rejections Among insurers, The New India Assurance Co. Ltd., a public sector insurer, topped the list with ₹7,038.04 crore worth of rejected claims in FY23-24. It was followed by ICICI Lombard General Insurance Co. Ltd., which rejected ₹2,016.81 crore in health insurance claims.The rejection of such a large volume of claims has raised concerns among policyholders and Members of Parliament (MPs), including Balashowry Vallabhaneni and Dean Kuriakose, who sought details of health insurance claims rejected during the year. Claim Settlement Ratios: Public vs. Private Insurers According to the Insurance Regulatory and Development Authority of India (IRDAI), claim settlement rates varied significantly between public and private insurers. – For every ₹10,000 collected in premiums, public sector insurers paid ₹10,122 in claims.– Private sector general insurers paid ₹7,077 for every ₹10,000 collected.– Stand-Alone Health Insurers (SAHI) had the lowest payout, at ₹5,463 for every ₹10,000 collected. However, when it comes to settling claims based on volume, private sector insurers performed better. For every 10,000 claims received: – Public sector insurers paid ₹7,984 claims.– Private sector general insurers settled ₹8,639 claims.– Stand-alone health insurers (SAHI) settled ₹8,635 claims. Health Insurance Premium Collections by State The MPs also requested state-wise data on health insurance premiums collected. According to the government, Maharashtra led the country, collecting a massive ₹31,258 crore in health insurance premiums during FY23-24. Karnataka followed with ₹12,017 crore, while Tamil Nadu stood third with ₹9,738 crore.This data underscores Maharashtra’s dominance in India’s health insurance sector, with its premium collections nearly 2.6 times higher than Karnataka’s and 3.2 times that of Tamil Nadu’s. Growth in Health Insurance Premiums Over Three Years Health insurance premiums in India have shown a consistent upward trend over the past three financial years: – FY21-22: ₹73,052 crore collected.– FY22-23: ₹89,432 crore collected.– FY23-24: ₹1.07 lakh crore collected. This reflects a 46.5% growth in health insurance premiums over three years, signaling increased awareness and adoption of health insurance policies. However, the simultaneous rise in claim rejections raises concerns over whether policyholders are getting adequate coverage and fair settlements. IRDAI’s Measures to Improve Claim Settlement 1. Faster Claim Processing and SettlementTo improve efficiency, IRDAI has set shorter timelines for claim processing across different settlement types, including cashless claims, reimbursements, and pre-authorizations. This ensures that policyholders receive timely approvals and claim payouts without unnecessary delays. 2. Detailed Communication of Claim RejectionsIf a claim is partially or fully rejected, insurers must provide a detailed explanation to the claimant. This must include specific references to the terms and conditions of the policy under which the claim was denied. This step aims to eliminate ambiguity and ensure that policyholders clearly understand the reasons behind the rejection. 3. Strengthened Grievance Redressal MechanismIn cases where policyholders are dissatisfied with an insurer’s decision, they can escalate their complaint to the insurer’s Grievance Redressal Officer (GRO). If the issue remains unresolved, they have the right to approach the Insurance Ombudsman at no additional cost. IRDAI mandates that insurers must comply with the ombudsman’s decision within 30 days. Failure to do so will result in a penal charge of ₹5,000 per day for each day of delay. 4. Approval Process for Claim RejectionsTo prevent unjust claim repudiations, IRDAI mandates that no claim can be rejected without approval from the insurer’s Product Management Committee (PMC) or a dedicated Claims Review Committee (CRC), a three-member sub-group of the PMC. This ensures that all rejected claims undergo proper scrutiny before final denial. 5. Interest Penalty on Delayed PaymentsIf an insurer fails to settle claims within the stipulated timeline, they are required to automatically compensate the policyholder. The penalty involves interest payments at the bank rate plus 2% for the delayed period. This provision ensures accountability and encourages insurers to adhere to timelines.

Daily Equity - Volkswagen's $1.4 Billion Indian Tax Dispute

Volkswagen’s $1.4 Billion Indian Tax Dispute

Volkswagen faces a $1.4 billion tax dispute in India over import classification. The case threatens its $1.5 billion investment, delays shipments, and raises concerns about foreign investor confidence in India’s policies.

Daily Equity - Budget 2025: Everything You Need To Know

Budget 2025: Everything You Need To Know

Budget 2025 brings big reforms! No tax up to ₹12 lakh, ₹1.5 lakh crore Capex Boost, Fiscal Deficit Down, Middle-Class policies up—India’s growth story accelerates! Union Finance Minister Nirmala Sitharaman presented her eighth consecutive Union Budget in the Lok Sabha on February 1, 2025. With a focus on fiscal consolidation, infrastructure development, and economic reforms, the Budget aims to sustain India’s growth trajectory while maintaining fiscal prudence. Here are the key takeaways and their implications for various sectors and stakeholders. Revised Income Tax Slabs for FY25 One of the biggest highlights of Budget 2025 was the major revision in income tax slabs under the new tax regime. The Finance Minister announced zero tax on income up to ₹12 lakh, a move aimed at providing relief to the salaried class and increasing disposable income.Here are the new tax slabs under the revised tax structure: More details on income tax policies, exemptions, and deductions will be disclosed in the Income Tax Bill, which is scheduled to be presented next week. Fiscal Deficit Targets One of the most crucial aspects of Budget 2025 is the government’s commitment to fiscal consolidation. The fiscal deficit for FY25 has been set at 4.8%, while the estimated fiscal deficit for FY26 stands at 4.4%. This marks a significant reduction from previous years, reflecting the government’s intent to balance economic expansion with financial stability. By keeping the fiscal deficit under control, the government aims to improve investor confidence and sustain India’s long-term economic momentum. Reforms Under Jan Vishwas Bill 2.0 The Finance Minister announced Jan Vishwas Bill 2.0, which aims to decriminalize over 100 provisions across various laws. This initiative is expected to foster a more business-friendly environment by reducing legal hurdles and improving ease of doing business. Additionally, an Investment-Friendly Index of States will be launched in 2025 to evaluate and rank states based on their business-friendly policies, encouraging states to compete in attracting investments. Tariff Rationalization for Trade Enhancement In a move to simplify trade policies and boost exports, the government has proposed the removal of seven tariff rates, leaving only eight in place after the latest revision. This streamlining of tariff structures is expected to reduce compliance burdens and enhance India’s competitiveness in global markets. Also Read: Union Budget 2025: Know What Gets Cheaper, What Gets Costlier Infrastructure and Capex Boost A major highlight of Budget 2025 is the ₹1.5 lakh crore allocation for 50-year interest-free loans to states for capital expenditure and infrastructure projects. This funding aims to accelerate growth in transportation, urban infrastructure, and rural connectivity. The initiative aligns with the government’s long-term vision of Viksit Bharat @ 2047, positioning infrastructure as a key driver of economic expansion. Also Read: Nil Tax on Two Homes Value: India’s Budget 2025 Simplifies Property Rules Healthcare Reforms and Exemptions on Essential Drugs Recognizing the importance of healthcare accessibility, FM Sitharaman announced that 36 life-saving drugs and medicines will be fully exempted from basic customs duty. This move is aimed at making critical healthcare solutions more affordable and improving public health outcomes. Furthermore, there may be an increase in allocations towards public healthcare infrastructure and AI-based diagnostics to enhance early disease detection. Macroeconomic Outlook and Market Reactions India Inc. widely welcomed the government’s measures, particularly in infrastructure, ease of doing business, and AI adoption. Experts suggest that capex-driven growth will have a multiplier effect on various sectors. The budget’s focus on capex, infrastructure, and energy transition is likely to benefit companies in these sectors. Also Read: Union Budget 2025: Know What Gets Cheaper, What Gets Costlier All-in-All The Union Budget 2025 presents a roadmap for India’s economic future, balancing growth aspirations with fiscal discipline. With an emphasis on infrastructure, ease of doing business, healthcare, and clean energy, the government aims to strengthen the foundation for long-term economic expansion. While certain expectations, such as income tax reductions, were not addressed, the budget sets a strong precedent for sustained economic reforms and global competitiveness. Market participants and industries now look forward to the implementation phase, which will determine the effectiveness of these policy measures in driving India’s growth trajectory.

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