Sa-Dhan Newsletter Volume 1 Issue 4

Micro-Insurance

agencies each of which have a specific accounting

Twenty- four hours hospitalization is necessary to put

process as well as financial year.

up a mediclaim.

1.

Member intimates Vimo SEWA/ Aagewan/

Largely, the IIS operates as an independent unit.

Organizer/office (within3 months of discharge

Earlier, separate account systems were maintained for

from hospital).

insurance premiums and claims, and the GTZ Fund,

which required an independent external audit, which

2.

Medical papers are scrutinized by the office

was a funder's requirement. But, the two accounting

organizer (if any paper is missing, the member

systems have been merged from 2000. Further, there

is asked to bring the same for further procedure).

are variations in the financial years for SEWA and

3.

Field worker visits the member (within 2 days)

partner agencies. SEWA's financial year ending is

and prepares a detailed claim report Sometimes

different from LIC's, necessitating SEWA to modify

she also visits the hospital or doctor, if required.

its financial year to that of LIC's. Meaningful

comparisons, therefore, between life insurance

4.

Report is submitted with the office organizer on

premiums and claims for a specific calendar year or

the next day of the visit.

"insurance year" are difficult. This is particularly so for

5.

Medical papers of the member are sent to the

the half-year periods involved at the inception of the

panel doctor for medical opinion.

insurance schemes with the LIC and GIC or, indeed

for the half- year of insurance cover completed at the

6.

Doctor sends back the papers with his technical

calendar year- end when each year's annual report

opinion.

and financial statements are prepared. The IIS

7.

The claims committee consisting of Aagewans/

management is aware of this problem, and a suitable

organizer decide whether the claim is payable or

management accounting system is now being

not and also determine the claim amount. The

designed.

claim's committee's decision is final and abiding

for every claim.

During the first two years of the scheme, the accounts

made no allowance for depreciation of equipment

8.

The office organizer records Approved/rejected

such as computers, which meant that the costs were

claims and members are accordingly informed

not properly apportioned over the whole time when

via postcard that they should collect the claim

the equipment was in use. Parallel to that, no dedicated

amount.

reserve was created for the replacement of such

9.

Finally, the member collects the claim amount

equipment as it became worn-out or obsolete. This

from Vimo SEWA.

has since been remedied.

10.2 Financial development of the scheme

5.  Maternity

Up to and including the insurance year 1992-93, the

The payment for the maternity claim is made to the

insurance operations of the ISS were conducted

claimant from at the end of the seventh month of

entirely through LIC or GIC, with SEWA acting in

the pregnancy to the third month of childbirth (on

effect, solely as an agency for the collection, of

the basis of birth certificate). The Health Cooperative

premiums and effecting of benefit payments. The

of SEWA gives pre-natal and post- natal care to each

details shown in the accompanying tables and analysis

claimant.

focus, on the period since SEWA assumed

responsibility for part of the insured liability, i.e. the

10 FINANCIAL ASPECTS OF IIS

insurance years from 1994-95 onwards. However,

because the figures are drawn from a number of

The financial aspects of the IIS from its inception in

different sources, notably the manual ledgers, and are

1992 up to 2000 are based on information from

stated for different periods of time, it has not been

SEWA officials, and accounting records.

possible to ensure full consistency between all the

figures. The figures set out in this commentary are

10.1  Accounting system

therefore in the nature of estimates, although they

The accounts of the IIS were maintained (until 2000)

do substantially correspond with those set out in

in the form of manual ledgers kept at SEWA Bank,

SEWA's Annual Report (1999).

which are in the process of being transferred to a

computerised ledger system. The accounting process

Table 8 shows the actual cash income and expenditure

has to follow the requirements of the different partner

of the insurance scheme.

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