Health Insurance Portability in India (effective October 1, 2011)

The scheme was proposed to come into force from July 1 earlier, but was deferred for three months due to certain outstanding issues with insurance companies.

Health portability will allow consumers to change their service provider without losing the basic coverage of health insurance. As per portability rules, consumers will get credit for the time already spent for covering the pre-existing disease along with bonus accrued to him from his past insurer.

However, health insurance portability will be limited to non-life insurers, which will allow policy switch with respect to all individual policies, including family floater policies.

Even individual members, including the family members covered under group health insurance policy of a non-life insurer, will be able to migrate from a group health policy to an individual policy or a family floater with the same insurer.

MetLife and Punjab National Bank enter strategic bancasssurance partnership

MetLife India and Punjab National Bank (PNB) have entered into a strategic business partnership to distribute life insurance products of MetLife. PNB has acquired a 30% stake in MetLife India's operations and a 10 year agreement to distribute its products through it's channels.

Final approval by the Govt. and financial regulators is awaited, post which MetLife would be known as PNB-MetLife India Insurance Company.

This joint venture looks like a win-win for both the parties involved. MetLife would receive a major boost to its distribution set up with PNB's more than 5000 branches and 60 million customers. This would help PNB establish itself more comprehensively in the financial services sector.

This deal also augurs well for the fledgling insurance industry in India. With 60% of PNB's branches located outside Indian Metropolitan areas, it would take life insurance to the oft neglected semi-urban & rural areas.

This deal is a testimony of the importance and effectiveness of bancasurance in the current distribution set-up. Insurance companies are constantly looking at cost optimisation and alliances with banks not only serves the purpose but contributes to profitability.

As per IRDA annual report 2009-10, bancassurance contributes 8.46% of new business premium (individual and group) and this is high for private insurers with 22.02% of new business premiums coming from bancassurance.