M Ramadoss faces suspension

Government has decided to take the extreme punitive measures against New India Assurance chairman M Ramadoss by suspending him over the irregularities in distribution of credit insurance cover to Paramount Airways. The cover was granted in 2009 by Oriental Insurance Company which was then headed by Ramadoss. In his absence chairman of Chennai based United India Insurance, G Srinivasan, will take charge.

The issue which involves insurance covers totaling to Rs 400 crore is currently under the scanner of Central Bureau of Investigation. These credit covers were used for sourcing loans from public sector banks. Trouble began when Paramount Airways came under a bad phase and the banks lined up to seek repayments only to discover that their exposure was not only to Paramount Airways but also to Oriental Insurance.

Earlier government has shown similar ire by denying extension to TS Vijayan owning to the numerous complaints against. The suspension of Ramadoss serves as the second example

IRDA Penalizes New India Assurance

Insurance Regulatory and Development Authority (IRDA) has imposed a fine of Rs 100,000 (Rs 1 lakh) on New India Assurance. The penalty came from a case of non-refund of Mediclaim to a policy holder. The insured person, Shri Hemendra Mehta, was staying abroad and refund was refused on this ground. When Shri Mehta emailed New Assurance India that refund can be considered for the period of stay outside India during the policy period, they didn't respond (Email dated 24.11.2009).

So the matter was taken up by IRDA and the regulatory body decided to penalize New India Assurance. With this, the IRDA has once again exemplified the tight regulatory control over the insurance companies. Not too long ago, SBI life faced IRDA's ire. (Read the whole article here).

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New India announces Policy Portability across countries

While we in India await Health Insurance portability across companies, New India Assurance has started health insurance portability across Oman and India. Policyholders who have a New India Policy in Oman under the family health scheme or group health scheme can now seamlessly enrol in a New India health policy when they return to India, without any preconditions. This would be helpful to a large section of NRIs stationed in Oman when they return, especially for the older set. As of now, we do not know if the reverse holds: that is a New India Assurance health policy holder being able to get insured through the company's policy in Oman under the same set of conditions.