Mrs. Nirmala Sitharaman, Hon. Minister for Finance, Ministry of Finance, Government of India, New Delhi.
Respected Madam,
We wish to draw your kind attention to the following for your consideration and suitable instructions.
You will be aware that for employees and officers working in the Banks, as per the Settlement arrived in 2015 between IBA and Unions, a Group Medical Insurance Scheme was introduced in lieu of the earlier scheme providing for actual reimbursement of hospitalisation expenses.
While finalising the Group Medical Insurance Scheme for the in- service employees and officers, it was agreed and decided that a similar scheme would be made available for the retired employees and officers.
While the premium on the Policy applicable to in-service employees is payable by the Banks, the premium for the retirees is payable by the concerned retired employee/ officer.
The insurance coverage under this medical insurance policy was finaliSed at Rs. 4 lacs for the retired officers and Rs. 3 lacs for the clerical and subordinate staff including sweepers, housekeepers, etc.
The Scheme was introduced to benefit the retirees as a welfare measure since the group medical insurance policy would be cheaper and hence affordable to them.
However, over the years, the premium has been increased year after year and many retirees are finding it difficult to pay the premium and renew the policy.
The following Table would explain the steep increase in the premium.
| Rs. 3 lacs coverage for retired workmen | Rs. 4 lacs coverage for retired officers | |
| Premium in 2015-16 GST Total | 4,930 690 5,620 | 6,573 920 7,493 |
| Premium in 2020-21 GST Total | 20,508 3,691 24,199 | 27,342 4,922 32,264 |
| Premium for 2021-22 GST Total | 28,715 5,169 33,884 | 36,652 6,597 43,249 |
| Increase over last year | 40 % | 34 % |
is informed by IBA that the hike in the premium has been on account of higher Incurred Claim Ratio (ICR) at 147%.
You are kindly aware and would also appreciate that the increase in the claims by the retirees during this period has been only on account of the hospitalisation for treatment of covid-19, wherein the private hospitals have charged the patients exorbitantly.
Almost 90% of the claims have been only on account of covid treatment and not for hospitalisation for other treatments.
We urge upon you, Madam, that in as much as the increase in claims and consequent ICR is mainly on account of settlement of claims for covid treatments, the same may be waived by the General Insurance Companies as a one time measure for this year alone for the purpose of measure the ICR.
We suggest and request that the increase in ICR other than due to covid treatment claim settlements may be taken as the basis for the revised rate of premium for the ensuing year.
This will reduce the increase in the premium rate considerably.
• Hence we shall be thankful if the Government could consider and issue an one time Advisory to the General Insurance Companies for this year alone to measure the ICR accordingly.
Similarly, we have been representing to the Government for exemption of GST on premium paid by senior citizens towards health insurance policies. We are conscious of the importance of taxes as an important source of revenue augmentation for the Government.
• But some concession in GST, only on the Health Insurance Policies and that too for the senior citizens would be a great mitigation for them.
We seek your kind indulgence, amidst your busy schedule of work, to consider these genuine problems sympathetically and extend some relief to these senior citizens in renewal of their medical insurance policies which is due on 1st November, 2021.
Thanking you,
Copy to:
• Secretary, DFS, MoF, New Delhi • Chairman, IBA, Mumbai
Yours faithfully,
C.H.VENKATACHALAM GENERAL SECRETARY