There should be a proper price/premium discovery through data analysis and a tender for the accident insurance cover offered under the Pradhan Mantri Jan Dhan Yojana, a top official of an insurance company said.
"Discovery of proper pricing through a tender for the Pradhan Mantri Jan Dhan Yojana is important so that all the players - private and public - get an opportunity to participate," a top official of a private insurer told IANS preferring anonymity.
According to him, the mega financial inclusion scheme is a new one and proper price discovery for the accident insurance is important given the huge numbers.
The government hopes to open around 7.5 crore new bank accounts as part of the financial inclusion scheme.
Each account holder will be offered a RuPay card with an accident cover of Rs.100,000.
The RuPay card is administered by the National Payment Corporation of India Ltd (NPCI).
According to insurance industry officials, the mandate for providing the accident insurance cover has been given to another private insurer though there is no official announcement to this effect.
The officials said the Jan Dhan Yojana scheme has changed the entire dynamics of the insurance coverage and hence proper price discovery has to be there.
The managing director and CEO of NPCI, A.P. Hota, was not available for clarifications when contacted by IANS.
"When the country wants foreign direct investment (FDI) in insurance there should be level playing field for the players," the official remarked.
A senior industry official did agree that actuarial analysis could be made from the number of lives currently covered under the accident insurance offered by general insurers and the life insurers as an additional risk cover.
Meanwhile, clarity is needed as to the amount of insurance - life and accident - coverage available for the account holder and the conditions under which claims are payable.
"The account holders should be clearly told as to the conditions of insurance coverage upfront so that confusion does not arise at a latter stage," R. Chandrasekaran, secretary general, General Insurance Council of India, told IANS.
He agreed that the risk of insurance industry getting a negative image - that it accepts premium but not the claims - if the policy conditions are not explained to the Jan Dhan Yojana account holders clearly.
Given the basic purpose of the Jan Dhan Yojana scheme - financial inclusion of the poor - and the demographic profile of the people targeted, stipulating conditions like the usage of debit/credit cards certain days prior to the claim is also not fair, feel industry experts.
As many banks have promoted general insurance companies, industry officials also expect them to approach the government with a demand that they should be able to provide insurance cover to their account holders, the industry officials said.
