Govt to re-examine capital limit in health insurance
Finance Minister Jaswant Singh said he would relook at industry demand to lower the Rs 100 cr entry limit in health insurance.business Updated: Apr 02, 2004 13:15 IST
Finance Minister Jaswant Singh on Monday promised to "re-examine" the industry demand of lowering the Rs 100 crore entry limit in health insurance if government and regulator IRDA were certain that it would not be misused.
"Time has come to re-examine this Rs 100 crore limit. But the problem is if we reduce the limit and it is misused," Singh told a Confederation of Indian Industry (CII) post-budget conference.
Some of the committed players and non-government organisations like SEWA were willing to enter the health insurance sector but found the entry limit too high.
"I am autonomous. These limits are fixed by IRDA. I don't want to ride hard on that as it is a sensitive horse," Singh said sounding a note of caution for relaxing the minimum capital limit.
Insurance Regulatory and Development Authority mandated a minimum Rs 100 crore capital limit for all insurers including health insurance companies as it wanted to permit only serious players to enter the liberalised industry.
Pointing out that the claim payout exceeds premium income in health insurance policies by 1.3 times, a top company executive said government can allow a lower capital limit for companies setting up a health insurance company in a particular city or region instead of a nationwide presence.
"I assure you that we are going to look into that," Singh said, adding the new scheme of a medical policy for only Re 1 per day would boost the health insurance and pharma sectors and enable hospitals to improve their services.
"A slow revolution is beginning here. We want to see India emerging as a healthcare hub of the world," Singh added.