Dated: November 22, 2006
Deputy Managing Director
Rangs Bhaban (8th Floor)
113-116, Old Airport Road
Dhaka – 1000
Re: Vetting of draft Contract for “W”.
We refer to your letter BA/CO/HR/2006/1814 dated 8 November 2006 on the above subject.
We have perused the Draft Contract for “W” to be executed between Bank 1 (“The Bank”) and Company 1(“The Company”).
Our comments are as follows:
|Recitation||In the first line of the recitation please replace the word “WHERE’S” with the word “WHEREAS”.|
|Schedule||The benefit schedule, premium rate and other issues contained in this Schedule are Commercial issues. Please check whether the Bank agrees with the issues contained in the Schedule.|
|Definition of “Child bearing age”, Clause I||Here “Child bearing age” has been defined to include married females within the age limit of 18 to 50 years. It is well known that females may bear child outside this age limit, i.e. before the age of 18 or after 50. Please check whether you agree to restrict “Child bearing age” within 18 to 50 years.|
|Definition of “Consultant”, Clause I||Please note that under this definition “Consultant” does not include Ayurvedic of Homeopath practitioners. The Bank should check whether this is agreeable.|
|Definition of “Dependant Family Members”, Clause I||Please note that under this definition “Dependant Family Members” does not include legal spouse and parents over the age of 60 years. Separated Spouse is also excluded. Children over the age of 25 are also not included. Please check whether the Bank agrees to this definition.|
|Definition of “Employee”, Clause I||It should be noted that under this definition “Employee” means someone who is employed by the bank for at least 30 hours a week. Which means all the employees of the Bank may not get to enjoy the insurance services, only those employees who work more than 30 hours a week for the Bank will enjoy it. The Bank should check whether they agree to this.|
|Definition of “Hospital”, Clause I||Please note that the Definition of “Hospital” excludes rehabilitation centre, natural care clinic, nursing home for the addicted, sanatorium or private chamber of a doctor.|
|Definition of “Hospitalisation”, Clause I||According to this definition, please note that “Hospitalisation” means, apart from confinement for some specific treatments mentioned, confinement in a Hospital for a period of at least twenty-four consecutive hours. Please check whether the Bank agrees to such time restrictions.|
|Definitions of “Intermediate Surgical Operations” and “Major Surgical Operations”, Clause I||In these definitions reference has been made to “annex – I” and “annex – II”. These two annexes are not provided with your letter for our perusal as such please inspect these two annexes and confirm that the list of surgical operations stated in them are agreeable to the Bank.|
|Clause III (b)||Under this clause the Company reserves the right to review the premium rates and benefit schedule by only giving 30 days written notice to the Bank, this clause is prejudicial against the Bank and as such we suggest that the second sentence of Clause III (b) should be deleted and replaced with the following sentence:“The Company may suggest revision of the premium rates and benefit schedule by giving written notice to the employer at least 30 days before the effective date; any change in the premium rates and benefit schedule shall be effective only after both parties mutually agree upon the change.”|
|Clause III (d)||Please beware that according to this Clause if any employee ceases to be a member at any time after the effective date, no premium shall be refunded to him.|
|Clause III (g)||Under this Clause the Bank is under a duty to pay any tax on premium as per Government regulation. Please check whether the Bank agrees to undertake this responsibility.|
|Clause IV||According to this Clause if hospitalisation is advised on emergency basis, prior notification is not necessary but an Admission Report has to be sent to the Company within 48 Hours of admission to the hospital or clinic. In our opinion this period of time is too short. During an emergency situation the member may be too ill or handicapped so as not to be able to remember the requirement of submitting the Admission Report to the Company; he may be unconscious or even in a coma or his mind may be too preoccupied with how to save his life. That is why we suggest that the 4thsentence in paragraph 1 of Clause IV should be deleted and replaced with the following sentences:“The Admission Report should reach the Company within 7 days of admission to the hospital or clinic provided that the member is not in a coma, unconscious or incapacitated in any way and if the member is in a coma, unconscious or incapacitated then the time will be calculated from the moment he comes out of the coma, becomes conscious or capacitated. And in case the last day for sending the Admission Report is a Government holiday then the said report can be sent on the next official working day.”
It should be noted that according to the 3rd paragraph of Clause IV, submission of hospitalisation claim without prior claim notification may adversely affect the claim especially for treatment at non-designated hospitals and in such case, the Company shall have the right to deduct up to one third of the payable amount from the claim. Please check whether the Bank agrees to such a term.
|Addition of sub clause||After Clause V (A)(c) the following clause should be added:
“d) The Company shall settle any amount settled by the Member which was thought to be not payable by the Company as per conditions of the contract but which were later revealed from medical evidence to be payable as per the said conditions.”
|Clause V (B)(h)||Please note that Standard rates of payment shall be applicable for various hospital charges in case of treatment at no-designated hospital/clinic or treatment at a designated hospital without notification and for apparently high bills. Please check whether the Bank agrees with this clause, which may mean that the full hospital bills may not be recoverable in all situations.|
|Clause VII (b)||According to this clause, first it is stated that inpatient treatment at hospital or clinic abroad shall be covered if satisfactory local treatment is not available then later it is stated that such expenses will be reimbursed at standard rate, as may apply for such treatment in Bangladesh. This is conflicting because the member will go abroad for treatment because there is no satisfactory treatment in Bangladesh, so at the time of reimbursement how will it be possible to compare the treatment abroad when there is no similar treatment in Bangladesh. So this clause is prejudicial to the interest of the Members because depending on this clause the Company may refuse to reimburse all hospitalisation abroad saying that as there is no similar treatment in Bangladesh they are unable to give costs at a standard rate. The Bank should raise this point with the Company and mutually agree upon a rate at which compensation for hospitalisation abroad will be given.|
|Clause VIII||Under this Clause, the insurance does not cover any claim resulting from any circumstance listed under this clause. Please check whether the Bank agrees to all such exclusions.|
|Clause IX (c)||According to this Clause, the Bank is entitled to receive “No Claims Discount” on renewal premium of a year provided that there was no claim in respect of all the Members under this contract throughout the previous year. This is an unreasonable term because it is extremely unlikely that none of the employees of the Bank who are members (the Bank having a substantial number of employees who will be members) would require hospitalisation throughout the whole year. So it is our opinion that each Member should entitled to claim a “No Claim Discount”. Please revise the clause accordingly.|
|General||All blanks should be filled in and appropriate dates should be inserted.|
Apart from the above observations, the terms and conditions of the Agreement are otherwise in order.
If you have any further query, please do not hesitate to contact the undersigned.
The Lawyers & Jurists
M.L.Hotel Tower Ltd, 208, Shahid Syed Nazrul Islam Sarani,
Bijoy Nagar, Dhaka-1000.