GlobeSecure_Oct 2020

October 2020 Edition || Issue #003 The Fine Print Insurance Unblocked Health Top up & super Understanding Top Up Insurance Plans Insurance is fun Click to read more Essence of Marine Insurance. Click to read more Regulator Updates Click to Read More

Health Insurance Corner Top Up and Super Top Up Policy What is Top up In Health Insurance ? The policy can be issued on Individual or Floater Sum Insured basis covering Top Up Health Insurance Policy will members of the family. If the policy is to indemnify an insured only when the be issued on an Individual Sum Insured aggregate of all Hospitalisation expenses basis, then a separate policy document (except Pre / Post hospitalization may be issued to each Insured. In case of expenses) of one or all policy members Hospitalisation where the expenses are exceeds the \"Threshold\" stated in the likely to involve the TPAs of both regular policy. It will respond for every Health Policy and the Top Up Mediclaim Hospitalisation after the threshold has Policy, the intimation/preauthorization been exceeded by previous request with regard to a Hospitalisation is Hospitalisation expenses subject to the to be given to both the TPAs of these sum insured's limit stated in the policy. Policies. In the case of a covered The sum insured is the maximum liability hospitalisation, the costs of which were of the Insurer for all members of the not initially estimated to exceed the policy. Therefore, this policy is intended to threshold but were subsequently found protect any balance amount payable when likely to exceed the threshold, the the sum insured in the Primary (basic) intimation to the named TPA should be Health Policy/Benefit scheme is exhausted. submitted along with a copy of intimation Suppose there is any expense in excess of made to the Primary Health Policy TPA/ threshold, receivable from any other Reimbursement Provider immediately on insurer. In that case, the Insured Person knowing that the threshold is likely to be has an option to recover it from either exceeded. that Insurer or this policy, but not from both Some insurers have the provision that the person taking a Top Up policy need not have any other Health Insurance Policy. However, such policies will not pay for expenses up to the threshold limits as given in the policy. Yet, all insurers have the provision that the policy can be taken in addition to any other Health Insurance Policy. The details of existing and previous Health Insurance policies in respect of each Insured Person have to be provided in the proposal form along with claim history. Copy of current/expiring Policy may be required to be attached to the proposal form.

Then what is Super Top Up Policy or Insurer are to be submitted to the TPA of the Top Up Health Insurance Policy. The A claim will be payable by the Insurer details of claims lodged and settlement regarding the expenses covered after the details under regular Health Policy since its aggregate of covered expenses for insured's inception should be furnished to the Top hospitalisation. Every insured person in a Up Health Insurer's TPA even when the family insurance policy exceeds the claim is not with the same Insurer. This will threshold level and limits of reimbursement enable a faster response by the TPA in under any other Health Insurance Policy future Hospitalisation requiring this policy's given to the insured person have been services. exhausted. Unlike the standard top-up plans, which has a deductible limit to any kind of Examples hospitalisation under a policy year (i.e the policyholder has to pay up to the specified If a person has a regular policy of Rs. 3 lakh limit every time medical services) are availed sum-insured and a top up policy of Rs. 4 under any policy year. The super top-up plan lakhs with a threshold limit of Rs. 3 lakhs, sums up the annual expenses of each and a super top up policy for Rs. 5 lakhs Hospitalisation to reach the deductible limit. with a threshold limit of Rs. 3 lakhs and The claim payment will be the amount by there are claims as under: which the total of such Covered Expenses in respect of hospitalisations with dates of i. If there is a single claim in a year of Rs admission falling within the policy period 2.5 Lakh, the regular policy will pay Rs exceeds the higher of the following: 2.5 Lakh. I. the threshold opted for the insured ii. If there is a single claim of Rs. 6 lakhs in person/family as applicable and stated in a year, the regular policy will pay Rs. 3 the schedule lakhs and the balance Rs. 3 lakhs will be paid by the Top-up Policy. II. the amount received/receivable under any/all Health Insurance Policies (whether iii. If there are unfortunately 3 claims in a issued or not by the Company). year, the first for Rs. 2.5 lakhs, the Reimbursement scheme and including second for Rs. 2 lakhs and the third for any amount paid earlier under the policy Rs. 4 lakhs. The first claim of Rs. 2.5 covering the Insured /Insured's family lakhs will be paid by the regular policy, applicable for covered expenses. in the second claim the regular policy will pay Rs. 50,000 and the balance Rs. How is Claim processed for a Top up or a 1.5 lakhs will not be payable under a super top up policy? Top Up policy as it has not crossed the threshold limit. In this case a super top n a Top Up or Super Top Up Policy, the TPA up policy can pay the balance amount at of the regular Health Insurance Policy will the end of the policy period. The third first process the claims. The TPA of this claim will be paid by the top up policy policy will balance admissible payments to the extent of Rs. 3.5 lakhs and the either to the hospital in cashless settlement balance will be paid by the super Top- or to the insured in case of reimbursement. Up Policy. The Insured has to submit the details of settlement made by the TPA of regular Health Insurance Policy in the case of cashless settlement. In the case of reimbursement, the above details along with photocopies of bills attested by Primary TPA or Insurer are to be submitted to the TPA of

Case Law Corner The Essence of Marine Insurance The Supreme Court of India in the case Bajaj The surveyor stated that the damage to Allianz General Insurance vs The State of window glass of pilot seat and damage to tail Madhya Pradesh (24 April, 2020), went into boom of helicopter are two separate the issue of the nature of transit insurance. incidents not related to each other. The The State of Madhya Pradesh, the insured, replacement cost of damaged window glass took a Transit (Marine) Insurance Policy from of pilot seat is below Rs. 10,00,000 and hence the insurer to cover the transportation of a would fall under the excess of the policy. The Bell 430 Helicopter from Langley, Canada to damage to the tail boom had occurred at the Bhopal. The policy was issued from 22 July hangar of the Airport at Delhi after 2005 for transportation of the helicopter with substantial assembly but prior to test flight standard packaging from Langley to Bhopal and not during transit and hence would not for a total sum insured of Rs.20 crores. The fall under the purview of marine insurance policy was subject to Institute Cargo Clauses policy as issued to the insured. (Air Cargo) etc. The duration of the policy was to be governed in terms of Clause 5 the The insured however replied stating that even ICC. though the damage was noticed after a month of customs clearance, the policy of On 5 October 2005, the helicopter was transit was up to Bhopal and therefore, transported in a knocked down condition by damage to the helicopter in the month of air to New Delhi. On 13 October 2005, the November 2005 would also be covered under helicopter was cleared by the customs and transit. The insurer, however, repudiated the was shifted to a hangar at New Delhi. On 21 claim on the ground that the loss that October 2005, the helicopter was inspected occurred to the helicopter was after the by a representative of the manufacturer. duration of the policy had ended as During the routine inspection, the window of mentioned in Clause 5 of the ICC. The issue the crew door was reported to be damaged. before the Supreme Court was whether The insured sought permission from the storage, unpacking and assembly of the Director General of Civil Aviation to fly the helicopter at New Delhi would fall outside the helicopter to Bhopal but was denied scope of the expression ordinary course of permission on account of the damage to the transit, terminating coverage under the window of the crew door. By a letter dated policy. The dispute in the case was on the 22.10. 2005, the insured informed the insurer interpretation of the termination clause of the of the damage and stated that the helicopter ICC. was being assembled at a hangar in Delhi so that the Helicopter can fly from Delhi to Bhopal. On 23 November 2005, the insured informed the insurer that upon inspection, the tail boom of the helicopter was found to be damaged. A surveyor was appointed by the insurer to assess the alleged damage to the window of the crew door and the tail boom of the helicopter.

Clause 5 of the ICC provided that: in possession of the carrier. The Supreme Court clarified as under: \"The ordinary 5.1 This insurance attaches from the time meaning of \"transit\" essentially connotes the subject-matter insured leaves the that goods are in motion between two warehouse, premises or place of storage points, but the period of transit may at the place named herein for the continue during intervals or periods when commencement of the transit, continues they may be loaded or unloaded and during the ordinary course of transit, and temporarily housed provided that this is terminates either. reasonably referable to the further of the carriage of goods to the final destination. 5.1.1 On delivery to the Consignees or The notion of \"in transit\" accepts that the other final warehouse, premises, or place movement of the goods may be of storage at the destination named interrupted by circumstances associated herein. with their transportation requirements. In the context of the policy, the words in 5.1.2 On delivery to any other warehouse, transit do not require transportation of the premises, or place of storage, whether consignment in a single trip from the prior to or at the destination named commencement to the final destination but herein, which the Assured elect to use include those interruptions in motion that either. are incidental to or in furtherance of the conveyance or transportation of the 5.1.2.1 for storage other than in the consignment. The policy's words ought to ordinary course of transit be construed to conform to the usual and 5.1.2.2 for allocation or distribution ordinary method of pursuing the venture or operation. The question of what does not 5.1.3 On the expiry of 30 days after constitute a deviation in furtherance of the unloading the subject-matter insured conveyance of the goods is a question of from the aircraft at the final place of fact that must be determined by both the discharge, whichever shall first occur. policy's intent and the actions of the parties. An effort that is wholly unrelated to The Supreme Court indicated that the the usual or ordinary method of pursuing term transit does not mean that the the transportation of goods would prevent goods must be actually moving at the the goods from being covered under the relevant time: they must, however, be still definition of the expression in transit under

the policy. Words used in the policy must is at variance with the ordinary course of be construed in their commercial setting transit. having regard to the purpose of the The term ordinary course of transit is the policy.” period when the cargo is in the course of At the time of customs clearance, no transportation, and not in the immediate damage was reported. It was when the control of the buyer or seller. After the helicopter was inspected by the goods cleared customs, the helicopter was representative of the manufacturer during in possession of the insured and it took a a routine inspection on 21 October 2005 voluntary decision of retaining the that damage was reported to the window helicopter in New Delhi on the basis of of the crew door of the helicopter. Clause commercial convenience. As found in the 5.1.2 of the ICC provides that the policy earlier part of the judgment, the intention may terminate upon the assured choosing of the respondent was not to prepare the to use an alternate place of delivery, prior helicopter for transportation by road to to the destination named therein for one Bhopal but to assemble the helicopter in of two purposes, either for storage other New Delhi and fly it to Bhopal. Once the than in the ordinary course of transit or insured decided to leave the goods in the for allocation or distribution of the cargo. hangar at New Delhi for its commercial The purpose of a transit policy is to cover convenience not associated with or in the carriage of goods to the final furtherance of the requirements of their destination. In the present case, storage of carriage to Bhopal, the transit insurance the helicopter in the hangar at New Delhi ended. The act of assembling the awaiting replacement of the spare window helicopter with a view to having it flown cannot be said to be incidental or in under its own power, instead of furtherance of the carriage of the goods transporting the packaged knocked down to the ultimate destination. It would be helicopter further to Bhopal by road, unreasonable to suggest that the transit would not constitute as storage in the policy intended to cover indefinite storage ordinary course of transit . of the helicopter at the hangar in New Delhi not brought about by the requirements of transport but determined by commercial convenience of the respondent. The degree of deviation of storing the helicopter at the hangar awaiting replacement of the spare window

Standard Health Regulator Updates Insurance Exclusions From 1st October 2020, standardised exclusions will have to be compulsorily adopted by all insurers as notified by IRDAI in circular Ref: IRDAI/HLT/REG/CIR/177/09/2019 dated 27.09.2019 Bariatric Surgery IRDAI/HLT/REG/CIR/177/09/2019 dated 27.09.2019 treatment Circular also in the exception relating to obesity allows Bariatric Surgery treatment to those with specified conditions. This is a very important benefit, because obesity is rising among people owing to lifestyle issues. The Definition of Pre- Pre-existing Disease means any condition, ailment, injury or disease: Existing Disease a) That is/are diagnosed by a physician within 48 months prior to the effective date of the policy issued by the insurer or its reinstatement or b) For which medical advice or treatment was recommended by, or received from, a physician within 48 months prior to the effective date of the policy issued by the insurer or its reinstatement. Associate medical IRDAI circular Ref. No: IRDAI/HLT/REG/CIR/151/06/2020 Date:11-06- expenses’ 2020 provides modified guidelines relating to Proportionate Deductions in claims, if the room rent is higher than what is allowed in the policy taken. However, IRDAI has stated that the following expenses are not allowed to be part of the definition of ‘associate medical expenses’: a. Cost of pharmacy and consumables; b. Cost of implants and medical devices c. Cost of diagnostics Further, Insurers shall not recover any expenses towards proportionate deductions other than the defined ‘associate medical expenses’ while processing claims. Insurers shall ensure that proportionate deductions are not applied in respect of the hospitals which do not follow differential billing or for those expenses in respect of which differential billing is not adopted based on the room category. This shall be clearly specified in the policy terms and conditions. Insurers are not permitted to apply proportionate deduction for ‘ICU charges’ as different categories of ICU are not there.

Knowledge Snippet Understanding Insurance 1. Marine insurance can cover goods which are in the hands of which of the following parties ? ❑ Seller ❑ Buyer ❑ Carrier ❑ All or any of them 2. The period of normal marine transit insurance is how long? ❑ The duration of transit – e.g. Warehouse to warehouse ❑ The duration of actual movement of goods but no storage. ❑ The duration of transit and storage till the goods are handed over to the buyer/insured in the normal course of transit. ❑ For any duration so long as the final destination is not reached or as allowed storage at the final destination. 3. Does Pre-existing Condition apply only to new insureds? ❑ Yes. ❑ No. It applies also when a new policy is taken because the old one lapsed and there is a gap in the coverage period. ❑ No. It also applies when the insurer is changed without going through the portability route, unless the new insurer allows otherwise. 4. Why is IRDAI allowing Bariatric Surgery from 01.10.2020 in Health Insurance Policies? ❑ Obesity is now common and hence has to be covered. ❑ Obesity is caused by one’s own negligence and hence it is wrong for IRDAI to allow it. ❑ Obesity is a morbid condition when it exceeds certain BMI levels and its cure will reduce many other illnesses such as cancer in future and save the patient and insurer from many future expenses.

The Fine Print Insurance Unblocked Editor: P C James Copyright 2020 Disclaimer : While utmost care has been taken in the preparation of the Newsletter, it should not be used or relied upon as a substitute for detailed advice or for formulating or taking business or personal decisions, which may need a proper study and taking of advice from those licensed to do so. Without prejudice to the generality of the foregoing information contained in the Newsletter, we do not represent, warrant, undertake or guarantee that the information in the newsletter is correct, accurate, complete or non-misleading. We will not be liable to you in respect of any special, indirect or consequential loss or damage. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher. E-mail : [email protected] Published by The Fine Print Principal place Of Business : PENINSULA BUSINESS PARK SENAPATI BAPAT MARG LOWER PAREL WEST MUMBAI MUMBAI 400013 || Broker License No. 144 || License category - Direct (Life & General) valid up to 06/04/2021 || CIN :U67200MH2003PTC138850 +91 98675 54477 [email protected]