Page 50 - Insurance Times August 2018
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Bold policy steps to the operationalisation and risk-carrying
expand insurance to insurance companies, he said, add-
ing the only weak link here would be
market the health provider network (hospitals
and clinics), which need to fall in line
B y announcing the merger of public sector units but also the insur- to offer suitable services on a single
three state-owned non-life ance sector as a whole. This initiative protocol and IT system network.
insurance companies, the would increase the risk-taking appetite
government has taken a bold of the merged entity, Jain said. Higher exemption to aid
step that will curb unhealthy competi- healthcare insurance
tion, improve governance, and bring Health protection to boost
discipline. insurance market The government raised the limit of
deducting health insurance premium
Union Finance Minister Arun Jaitley, Jaitley said the government would and/or medical expenditure from Rs
while presenting the Budget for 2018- launch a flagship called the National 30,000 to Rs 50,000 under Section 80D
19, said National Insurance Company Health Protection Scheme to cover over of Income Tax Act.
Ltd, United India Assurance Company 100 million poor and vulnerable families
Ltd, and Oriental India Insurance Com- (approximately 500 million beneficia- All senior citizens will now be able to
pany Ltd would be merged into a single ries) providing coverage up to Rs claim benefits of deduction up to Rs
entity and then listed. 500,000 per family per year for second- 50,000 per annum for any health insur-
ary and tertiary care hospitalisation. ance premium and/or any general medi-
Economic Affairs Secretary S Garg said cal expenditure incurred. People in In-
the process of consolidation and listing This will be the world’s largest govern- dia still look at tax benefits for insurance
would be completed in 2018-19. ment-funded health care programme. premium payments and this will be an
effective stimulus towards increasing
Ashvin Parekh, managing partner, Bhargav Dasgupta, managing director the penetration of health insurance.
Ashvin Parekh Advisory Services LLP, and chief executive, ICICI Lombard,
said none of the three companies had said the Rs 500,000 cover and increase However, health and general insur-
a good financial profile. The merger in medical insurance tax exemption for ance companies would need to look at
and eventual listing on the stock ex- senior citizens indicated the focus of offering attractive features for people,
change should help to improve gover- policymakers on ensuring protection Roy said."We have been demanding
nance. There is a need to enhance ef- against health hazards for India’s popu- the merger of all the four public sec-
ficiency in claims management and lace. Joydeep K Roy, partner and tor insurance companies to form a
underwriting. leader - Insurance, PwC India, said In- larger organisation similar to LIC. With
dia was moving towards a framework New India Assurance going for an IPO,
Insurance sector analysts said such of a National Universal Health Insur- merging the three is a positive move.
consolidation, when it fructifies, in- ance scheme. The merger will bring in synergy and
creased market discipline. While the increase the strength of the employ-
market potential for non-life insurance This would be a precursor and an ex- ees,” said S Vasudeva Iyengar, presi-
is huge, many players often indulged in periment, and therefore it looked like dent, United India Insurance Officers’
practices that vitiated competition. this would need to be a public-private Association. He said United India Insur-
partnership between the government ance had around 17,000 employees
Niraj Jain, chief executive and principal and the insurance companies. and together the three firms would
officer of Lambach Insurance Brokers, have around 50,000 employees.
said the merger was another good move The most appropriate thing to do for
that would not only stabilise the three the government would be to partly K Govindan, general secretary, General
subsidise premium payment and leave Insurance Employees’ All India Associa-
tion (GIEAIA), asked the government to
merge all the four PSUs, including the
listed New India Assurance. Besides, the
current plan for merger is towards disin-
vestment and the union is against disin-
vestment. (Source : Business Standard)
50 The Insurance Times, August 2018
