Karuna Trust, Karnataka - ZEF

Good and Bad Practices in MicroinsuranceKaruna Trust, India4. The ProductTable 4.1 Product DetailsProduct Features and PoliciesMicroinsurance Type Partner-agent health insurance productGroup or individual product Group policy for NIC, individualized by Karuna TrustTermOne yearEligibility requirements Targeted at people around poverty line, living in the areas of operationRenewal requirements Premium paymentRejection rateNo rejection reportedVoluntary or compulsory VoluntaryProduct coverage (benefits) • Rs. 50/day ($1.10) in case of hospitalisation as compensation ofincome loss; max for 30 days• Rs. 50/day ($1.10) in case of hospitalisation paid to special drug fundat the facility used; max. for 30 days• In case of surgery, Rs. 500 ($11) are paid for compensation of loss ofincome and Rs. 500 ($11) to drug fund; restricted to one surgery perperson and yearKey exclusionsNonePricing – premiums Rs. 22/year ($0.50)Pricing – other fees -4.1 PartnersWith the end of the pilot phase 2002-2004/05, Karuna Trust’s partners in providing theinsurance are National Insurance Company and the public health authorities.As a pubic insurer, developing products for the poor is part of NIC’s social responsibility andis requested by politicians. NIC bears the financial risk in this partner-agent arrangement andhas agreed to a claim ratio of up to 150%. Claims beyond this level are borne by KarunaTrust. NIC’s regional office is very positive about the health insurance pilot and interested inimproving its performance. For them, the scheme is not only a social obligation imposed byinsurance regulations, but a matter of heart. They are keen to learn how products for the poorcan work. The relationship between NIC and Karuna Trust seems to be very good.The public health facilities are the scheme’s only designated providers. The health authoritiesand some doctors participate in the (district/taluk level) coordination committees of thescheme. By participating in the coordination committee, the provider side is directly involvedin the scheme’s implementation. They are more than simply the supply side of health care.4.2 Distribution ChannelsKaruna Trust has implemented an effective distribution mechanism through offering clients avariety of alternative entry points, as illustrated in Figure 4.1.24