Medi-Claim Renewal Rates for SBI Retirees may Rise 300%

Renewal premium rates of the family floater group medi-claim policy for retirees of State Bank of India (SBI) may go up by 300% or more.

The family floater policy had replaced the SBI Retired Employees Medical Benefit Scheme that gave assured benefit of Rs. 7 lakh to pensioners/ spouse/ dependants during their lifetime by paying Rs.62,000.

High Claim Ratio

The family floater was launched on January 16, 2016, and was due for renewal on January 15, this year. According to the terms, the rates for renewal would be negotiable if the claims ratio exceeded 140 per cent.United India Insurance had conveyed to the bank that the claims ratio had exceeded this level as early as on November 15, 2016.Anticipating further escalation by the end of the policy term in January 2017, it had quoted renewal premium rates with high loading percentages.

Changes Approved

Following discussions with the insurance company and brokers, the SBI management approved modifications in the policy and its renewal on the revised rates across various plans.

Sources say that an estimated 2.43 lakh pensioners, their spouses and children (counting up to around five lakh in total) are likely to be impacted.According to them, the higher premium will see many opting out, leading to likely escalation in premium rates in the years to come.

Service Tax Hike

They are concerned that the Centre’s proposal to raise service tax from 15 per cent to 18 per cent would only add to the premium outgo.The policy will continue to be available to pre-merger retirees, surviving spouses of pre-merger retirees, and deceased employees of erstwhile State Bank of Saurashtra and State Bank of Indore.New retirees of associate banks, which are expected to merge shortly, will also be permitted to join in.Prospective members can opt for any one of these by paying the premium from their own sources.