All 4 Public Sector Insurers Faced Losses of 26,364 cr in Health Insurance
According to the recent audit report by Comptroller and Auditor General of India (CAG) the all four public sector insurers of India New India Assurance Corporation, United India Insurance Corporation, Oriental Insurance Corporation and National Insurance Corporation have faced a total loss of 26,364 cr rupees in Health Insurance in last five years.
In the span of 2016-17 to 2020-21 the four PSU health insurance incurred a huge loss of around 26,364 cr rupees due to higher claims which occurred in group policies, according to the Comptroller and Auditor General of India in an audit report presented in the parliament recently.
According to the CAG of the country, these losses in health insurance of PSU increased the overall loss of these 4 public sector insurers. It gained much acceleration and increased the number of overall losses. Along with that the burden of health insurance losses has also decreased or even totally wiped out the profit of other related business of these four public sector insurers companies.
According to the report, a drastic change in the number of health insurance has been also seen during 2016-17 to 2020-21. The number of health insurances has also declined in these four public sector insurers companies of India.
It has also affected the private sector insurance business. The health insurance business is the second largest business of these four PSU Insurers with motor insurance being the first largest business of insurance companies. The gross premium of health insurance during the last five years is 1,16,551 cr rupees.
According to the Comptroller and Auditor General of India, the recent guidelines for the group policies of health insurance laid down by the finance ministry were not complied with these public sector insurers companies and in result the lapse of health insurance occurred.
There are a few other reasons for this loss in the health insurance sector: improper claim management, lack of validation checks by the information technology (IT) of these companies, undermining the report system, improper functioning.
According to the audit report presented in the parliament the premium of health insurance in these companies was less and claim for these policies was more.
The finance ministry and responsible authorities need to find appropriate solutions for the boost in the sector of health insurance portfolio and fill the gap between these losses. It is time to adopt disruptive new rules to increase the feasibility of health insurance thus it can help in the overall economy of the country.
Questions And Answers:
Q1. How much loss has occurred in the health insurance portfolio?
Ans. 26,364 cr
Q2. Who presented the audit report in the parliament?
Ans. The Comptroller and Auditor General of India.
Q3. Which are those 4 PSU insurance companies?
Ans. New India Assurance Corporation, United India Insurance Corporation, Oriental Insurance Corporation and National Insurance Corporation.