#Insurance scam during crisis

Insurance companies are cheating the people, and destroying their own credibility during pandemic

Published On: September 16, 2020 01:00 PM NPT By: RUDRA KHADKA

KATHMANDU, Sept 16: Nepal’s insurance companies have long been accused of defrauding the people. Even after life and non-life insurance schemes mature, the companies refuse to make payments as per the agreements, and delay in the name of processing paper works. People rushed to insure when insurance companies advertised a scheme of 600 rupees, where you would get paid 100,000 rupees in case of coronavirus infection. According to Beema Samiti, around 1.3 million people rushed to insure in the immediate aftermath of the pandemic. Now the companies are changing their tune. Moreover, the regulatory agency that should have carried out the investigation and punished the companies is singing the same song. 

Beema Samiti, the regulatory body, amended the insurance policy criteria in the midst of the pandemic. This has eroded the already dwindling trust of the people in the insurance companies.  

The insurance companies started selling corona insurance from April 3. Beema Samiti amended the policy within five months of the pandemic. The agency amended the policy criteria on Monday. 

As per the amended policy, those staying at home or in hotel isolation will only get 25% of the insurance amount--25,000 rupees as opposed to 100,000 rupees as agreed upon during the time of insurance. And those getting treatment in hospital will only get 75% of the claimed amount.  

The insurance companies had earlier said that the insurers would immediately get 100,000 rupees if they get coronavirus. An individual paid one thousand rupees and those who opted to insure in groups paid 600 rupees each for the advertised policy. 

The amended insurance policy has reduced the amount to be received by insurers by 75%, but the amount an individual pays to the company remains the same. Nirmal Adhikari, deputy director of Beema Samiti, says that the number of claims exceeded more than the capacity of the state mechanism, and that's why the amendment was carried out.  “The government has provided subsidies in corona treatments, PCR tests, and the amendment of the insurance policy ends multiple facilities that an individual enjoys from the state,” said Adhikari. He, however, said that the claims made before the amendment would get 100,000 rupees. 

Former executive director of Nepal Rastra Bank Nar Bahadur Thapa says it is unacceptable that the new condition has been set for insurance claims. “This is a lost opportunity for the companies to earn people’s trust,” Thapa added. 

A corona-infected has to get a letter from a local government unit in order to claim the insurance money. For those staying at home isolation, they have to get records from the Ministry of Health and a letter from their local government, and discharge papers from hospital, if hospitalized for corona treatment. 

Moreover, if insurance companies suspect foul play, they can go for a PCR test of the claimant. If the government took care of treatment costs then the individual will not be reimbursed for drugs-related expenses. Also, if a person is infected within 30 days of buying the policy, the companies will not pay the claimant. The time-frame was 15 days before the amendment. 

Even if the claims made before the amendment are supposed to receive the full 100,000 rupees, the insurance companies have been cheating the people by stating the new amendment in place. 

“Almost 25% of the people have enrolled in at least one of the insurance schemes. People feel cheated when those in power think they can outsmart the people. We cannot expect economic prosperity when people think that the state is involved in cheating,” said Thapa. 

Deputy director of Beema Samiti said more than 570 million rupees has been collected from the corona insurance scheme. 

Only 30% claimants have received payments 

The insurance companies have not only delayed paying the claimants, but they have so far made payments to only 30% of the claims. According to the law, the insured should get payment within seven days of the claim. 

Suma Shrestha of Maitidevi says he has not received payments even though he submitted the paper works two months ago. “They demand a PCR report from the government lab, and a letter from the local unit. They are only delaying the payment. We insurced with the hope that it would help us during the crisis,” said Shrestha. 

Non-life insurance company and Nepal Reinsurance Company had agreed to bear the risk, and the government had encouraged the people to insure in groups by providing 50% subsidies. As the number of claimants increase, the insurance companies are finding ways to delay payments, and cheat the people they once courted to insure. 

The story first appeared in Nagarik daily on September 16. 

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