Thiruvananthapuram: Not everything hunky-dory about insurance companies

Thiruvananthapuram: The Comprehensive Health Insurance Agency of Kerala (CHIAK), the nodal agency constituted for the implementation of the Rashtriya Swasthya Bima Yojana (RSBY) for BPL workers, is awaiting feedback from the Competition Commission of India (CCI) after it slapped a fine of Rs 671 crore on four national insurance companies.

A law department official told DC that the State Government was unlikely to go in for litigation against National Insurance, New India Insurance, Oriental Insurance and United India Assurance (UIA) even though it had in fact cheated the Kerala Government by increasing the premium exorbitantly during 2010-13 without informing.

CCI’s four bench commission had found that the four insurance companies were resorting to illegal practices when they decided to join hands to win the tender process in favour of UIA. During 2010 – 11, the State Government had paid a premium of Rs 421 to UIA per beneficiary which was then increased to Rs 748 in 2012 – 13 and by the next fiscal year, it was further increased to Rs 1274. This was done by UIA when they should have abided by the stringent tender process.

As per statistics obtained from CHIAK which comes under the labour department, there are 32 lakh families from Kerala included in the RSBY scheme which has got a total of Rs 1.40 crore individuals. A senior Government official told DC that an understanding was reached between the four insurance companies and they may not be aware as to how much was the loss incurred by the Government.

“Since these insurance companies are PSUs, we may not know the extent of the loss generated. But since it is the State Government which is paying the premium, the beneficiaries will get the RSBY scheme without fail. We have to get confirmation from the CCI so as to take future course of action”, said a Government official under anonymity.

Unfortunately the finance department is in the dark, but a law department official told DC that if the State Government decided not to go in for litigation, it was because it respected the CCI’s four-member bench verdict. Currently it is Reliance General Insurance (RGI) which is drawing the premium of Rs 738 paid by the State Government on behalf of BPL families under the RSBY scheme. But a top insurance official working in the State claimed that RGI did not fully cover major accidents.