Saturday, July 28, 2012

NRIs in US: Some Food for Thought

There is a large contingent of “Hindustan Leavers” in the West, in places like the US, Canada, and the UK. In the US, there are probably over a million NRI Dollar-millionaires, in terms of liquid assets. Let us take the case of one such NRI with exactly a million US in liquid savings under his belt.
Such an NRI is either a well-paid salaried professional or a businessman. Either way, these days, the economic environment in the US has turned hostile for both these groups. Business climate has deteriorated significantly in most business sectors; and those still in jobs are facing long periods of zero pay increases, and near-zero lateral shift options.
Property, debt and equity (including through mutual funds) are no longer attractive investment options in the US, with positive returns by no means guaranteed. For many NRIs, their home loans are “underwater”, meaning that the loan outstanding is higher than the value the home will fetch if sold. Even if it is not, home prices are so low that most cannot countenance selling the homes they live in. Those approaching retirement age, say those around 60 years of age, are facing the grim prospect of living on their capital post-retirement, because, the years since 9/11 have been “the lost decade”, with their savings dwindling to half or less what it was worth before that watershed event. So, even if he has unencumbered savings and investments of US $1 Mn or its equivalent, with current earnings of around the same sum, assuming interest earning @3% on savings, they are looking at a net pre-tax annual investment income of no more than $30,000 per annum or $2,500 per month, which is close to the minimum wage in some places in the US. So much for the attractiveness of being a dollar millionaire!
Now assume that the same person chucks up everything and brings his $1Mn to India. He gets Rs.5.6 crores. For Rs.0.6 crores, he can buy a comfortable, lavish home of his choice in any place other than in Greater Mumbai (Mumbai-Navi Mumbai-Thane) and NCR (Delhi-Rohtak-Gurgaon-Noida). If he wants to avoid traffic jams, pollution and bad roads, he needs to give a few other cities, like Bangalore and Chennai a miss. (Think Mysore, Surat, Coimbatore, Chandigarh) The remaining Rs.5 crores, he can invest in nearly risk-free securities at no less than 8.5% per annum. Even allowing for average rate of tax @28%, he will be able to earn after-tax income of over Rs.250,000 per month – a princely sum that takes him into the wealthiest 1% of India's population! At a cost of not much more than Rs.10,000 per month, a mere 4% of his monthly after-tax income, he can get all the domestic help he needs, to live a cosy, pampered life. For a few Lakhs more, they can get entry into the most exclusive clubs in any town – a passport to a genteel life of leisure. He has the chance of investing almost all his spare cash in gold (taking Nouriel Roubini's advice to heart) and thereby reduce his tax bill (capital gains for gold held for over 3 years is taxed at concessional rate).
Indeed, he will find that while, in the US, he can look forward to only bad news, and being able to barely make ends meet financially, in India, he is positively rich – and concomitantly, has a risk appetite and margin for losses that allows him to earn superior returns through judicious investment in equity shares.
So then, what is stopping a reverse India-bound exodus of rich NRIs? 
  • First and probably foremost, inertia and resistance to change. They have become telephonically mobile but geographically immobile! But there is evidence that many are moving when they see the light, rather than waiting to feel the heat of a receding economy.
  • Second, many of them think that India means Mumbai or Delhi; the rest of India does not exist. 
  • Third, many cite unwillingness of children to move to India. That should not be a problem for the "empty nest" stage NRIs. 
  • Fourth, they simply haven't realised how cheap the Indian rupee has become; and how this changes the scenario materially. This, juxtaposed with the fact that India is among the few countries where business sentiment continues to be buoyant, with several attractive investment options, offers a compelling proposition: choose India as a retirement destination! 
  • Indeed, some who are reluctant to move lock, stock and barrel, can simply use India as a waiting room to wait out the recession – and then return to their locked up homes when the US economy looks up again. There is no need to give up US citizenship or green card. All you need is a PIO card! 

Good idea, don't you think?  

Saturday, July 14, 2012

Gender, Privacy and Ethics

Long back, I had blogged about why, when it came to procreation, people are seduced by technology to sally forth into uncharted moral and legal waters, instead of simply accepting the morally and legally acceptable solution called adoption.

We are now finding a similar set of dilemmas coming into focus thanks to the Pinki Pramanik case - that of the concept of gender and its intersection (or shall we say, collision?) with rights to privacy and our sense of right and wrong (ethics and morality). Here, too, a simple solution exists.

Pinki Pramanik thinks she is a lady. That should be enough for the rest of us to treat her as one. If our law allows ladies to be exempt from being punished for rape, that is a defect of our law - and anyone consistently claiming to be a lady should be allowed the benefit of such a law.

If our culture can tolerate, and indeed assign roles (however peripheral) to transgenders or cross-dressers in our culture, and give them the right to proudly say that they are hijras, and even give Shikandi (who thought she was a lady), the right to be treated in battle as a lady in the Mahabharata, there is no reason why, when it comes to a case like Pinki, she should be harassed and humiliated.  She should be treated as a person with due solicitousness - just as we treat the differently-abled in society.

If it is proved that Pinki has committed violence, she should definitely be punished for it. But, here again, the allegation is a private criminal complaint, and the only person who has the right (locus standi)  to prosecute Pinki for the offence alleged is her partner who alleges the violence. Hopefully, the decision will go though without the taint of the controversy about Pinki's gender clouding the decision, because that is really a non-issue. (In fact, just as I get ready to post this entry that has been a few days in the draft stage, comes the news that Pinki's partner has admitted to have been spurred to make the rape and masculinity charges by a person who was engaged in a bitter property dispute with Pinki). Whatever is the truth, what becomes clear is that Pinki's suffering was unnecessary and avoidable. She has fallen victim to the general intolerance of ambiguity in our Society. Everything has to be right or wrong; black or white - no space for grey!

In sports, at the international level, the case of Caster Semenya has brought out the difficulty of "proving" gender. Instead of learning lessons from that episode, we are going headlong into committing the same mistake, forgetting that mandated gender testing is an affront to the target's right to privacy and human rights.

On a slightly different note, Bidhan Barua's case - of his right to undergo gender-altering surgeries - has also got its fair share of headlines. Here too, the simple  solution as I see it, is to allow people like Bidhan do what he/she wants - like we do not raise eyebrows for cases of Botox shots for eliminating wrinkles and crow's feet.

Thursday, July 05, 2012

Oriental Insurance Rejects Mediclaim Claim Because Hospital Reduced Bill !

In November, 2011, I had written about the maid in my office who met with a freak accident and lost her eye when someone chucked a stone that hit her while she was travelling by Central Railway local train. This is a sickeningly sad and cruel sequel to this poignant story.  
Darshana was admitted to Bombay Hospital where she underwent re-constructive plastic surgery on her nose bridge that was shattered; and on her eye, where the entire socket was crushed. She had to stay indoors for almost a month after she was discharged from hospital, wearing dark glasses. 
During this convalescence period, she remembered that she had paid for a Mediclaim policy and, after some looking around, was relieved to find that it was valid and covered upto Rs.50,000 of medical expenses. When it came up for renewal, she somehow scrabbled around for money and paid the premium and renewed it, as she now realised more acutely the value of health insurance. 
Darshana had so much goodwill with her several employers that they pooled money and helped her pay most of her hospital and post-hospitalisation costs. The hospital bill came to Rs.1,17,090 and, after explaining the circumstances and pleading for a lower bill, the doctor and surgeons' fees were waived, and a final bill of (-)48,022 was issued representing the reduced charges. She managed to collect the Rs.69,068 needed to pay off her hospital bill. 
Barely three months later, Darshana's husband died. Now, she was required to be the sole breadwinner for her aged mother and 11-year-old son. 

Now let us get back to the saga of her Mediclaim policy with Oriental. She managed to file her claim in respect of the policy about a month after the accident. The TPA (MD India) first rejected her claim saying that she had not intimated them within 24 hours of the accident. We explained her circumstances to Oriental Insurance, and the fact that she did not know that the insurance company needed to be intimated immediately, and the technical defect was condoned. 
We then went through a chain of correspondence with the TPA, and though we responded promptly within 2-4 days, the next letter from the TPA always came after about a month.  Each time, some small point or the other was raised, and we clarified, or did the needful. After almost 6 months, during which they sent an investigator to meet Darshana and also sent an investigator to Bombay Hospital to check the genuineness of the bills, on July 3rd, 2012, the TPA of Oriental issued us a copy of a Pre-Repudiation Statement. They gave two reasons for rejecting the claim : 
(1) the exact amount of the claim was not mentioned in the claim form filed by Darshana; and 
(2) the final bill was not  submitted; and that only an interim bill was submitted. 
Since our policy cover was Rs.50,000 and there were NIL exclusions, obviously, if an expense of Rs.69,068 was spent, the claim amount would be Rs.50,000. This is also obvious from the policy document itself! Hence, the first ground of repudiation was a lame, hypertechnical ground. 
The second ground was a patent untruth as Darshana had submitted the original final bill. In any case, we emailed them a copy of the same. 
When we spoke to the MD India Head for Thane, Mr Pallaw Saxena,  and the officer (Ms Rema) at Oriental Insurance, they agreed to consider our submissions. In just 2 more days, we get an email telling us that the claim has been rejected - for a new reason - that the Final Bill sum is negative. By citing the Final Bill, they have admitted that the second ground in the Pre-Repudiation Statement was an untruth!  Worse, effectively, they have rejected the genuine claim because the Hospital reduced its bill! 
We explained the obvious to both, Mr Saxena, and Mr Adhav, the Divisional Manager of Oriental Insurance in Thane - that these two bills were running bills, and the arithmetic sum of these bills was the same as the receipt amount - and the receipt mentioned the two bill nos that the payment pertained to. Yet, as of today, a third blow has hit Darshana - her genuine, valid health insurance claim has been rejected. Of course, I await the formal letter from oriental Insurance, but going by the unhelpfulness of the Oriental Insurance people, I do not expect a reversal of decision, going against the TPA's (dishonest) rejection of claim. 
Now we have to find out what grievance redressal mechanism is appropriate. Grievance Cell of Oriental? Ombudsman? IRDA? Consumer Protection? Which forum is appropriate? In which order? Are any of them mutually exclusive?  What are the next steps? Go to the Press? So many questions; and no clear answers. Need advice. Anyone who reads this and can advise, please tell us what to do next.  If you know anyone who can help with advice, please share this with them. I have already begun the process by writing to the Chief Manager Customer Services Dept, of Oriental Insurance. 
For whatever it is worth, I am uploading the scans of the Insurance Policy, the two bills and receipt of Bombay Hospital and the Pre-Repudiation Statement of the TPA. These documents are sufficient  to justify Darshana's claim, and you can see for yourself the unfairness of it all.  
After our insistent follow-ups, it has reached a stage where both, Mr Adhav of Oriental Insurance and Mr Saxena of MD India are not picking up our phone calls. 

PS: Update:  I am glad to report that since I wrote this entry, the TPA has quietly paid the claim, with not so much as an explanation for the change of heart. The amount has been credited to the lady's bank account today - Jul 28, 2012.

Pre-Repudiation Statement 
First Page of Mediclaim Policy 

Second Page of Mediclaim Policy

Final Bill of Bombay Hospital

Interim Bill of Bombay Hospital 

Receipt of Bombay Hospital - Note the 2 Bill Nos to which the Receipt pertains