Page 45 - MEDICAL AND HEALTH INSURANCE

MEDICAL AND HEALTH INSURANCE

large groups to encourage good claims control and may be utilised to

offset renewal premium as a form of business retention; this will be

discussed later in this text

Owing to the nature of its composition and group size it is not uncommon

for insurers to extend cover for pre-existing conditions as well as to opt for
other covers, which would normally be excluded in the individual market,

for example, purchase of prosthetic appliances, etc. Such flexibility of

benefit structures and additional options outside the standard individual
market is greatly seen in large group schemes to meet the competitive

edge of the customer's need.

Renewal for group PMI policies is on a yearly basis, subject to underwriter

consideration and terms as well as premium rating may be altered,

depending on the experience and changes of the group size.

2.2.3 EXPERIENCE-RATED AND COMMUNITY-RATED GROUP SCHEMES

In the derivation of group pricing, the premium is computed according to

the group's claim experience called 'experience rating' over the previous

twelve months or more. In all cases, insurers have to cost in the

administrative charges with the projected claim for the period to be
covered. In such a scenario of level premium, regardless of age or gender,

it is also termed as 'community pricing'.

This is mostly applicable for group policies excluding individual and small

group products.

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