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<div class=Section1>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Trebuchet MS","sans-serif";
color:blue'>Dear Jim<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Trebuchet MS","sans-serif";
color:blue'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Trebuchet MS","sans-serif";
color:blue'>I also received it through a web-search that sends me articles relating
to “micro” insurance generally. It was an article published in the
New Vision news paper which is one of the big national daily papers in Uganda.
The article was on the front page of the paper I believe a week or so ago. I
have no doubt that there are always two sides to a story and I also have no
doubt that editors globally tend to print stories that highlight issues in the
worst light possible because that is how they sell newspapers!<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Trebuchet MS","sans-serif";
color:blue'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Trebuchet MS","sans-serif";
color:blue'>Putting the specifics to one side, I do think that the Micro
Insurance Network steering committee might put some thought into what the role
of the MiN is in the public arena. It is inevitable that in the future there
will be some bad press about micro insurance and the way that the industry body
responds at that time will be critical and it will need to be timely so having
something ready to go which states industry facts will be critical.<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Trebuchet MS","sans-serif";
color:blue'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Trebuchet MS","sans-serif";
color:blue'>Thanks<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Trebuchet MS","sans-serif";
color:blue'><o:p> </o:p></span></p>
<table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0 width=680
style='width:510.0pt;background:white;border:none;border-bottom:solid #00427F 1.5pt'>
<tr>
<td colspan=2 style='border:none;padding:0cm 0cm 0cm 0cm'>
<p class=MsoNormal><b><span style='font-size:14.0pt;font-family:"Trebuchet MS","sans-serif";
color:black'>Richard Leftley</span></b><span style='font-size:14.0pt;
font-family:"Trebuchet MS","sans-serif";color:black'><o:p></o:p></span></p>
</td>
</tr>
<tr>
<td colspan=2 style='border:none;padding:0cm 0cm 0cm 0cm'>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:10.0pt;font-family:"Trebuchet MS","sans-serif";color:#91897E'>President
& CEO<o:p></o:p></span></p>
</td>
</tr>
<tr>
<td width=441 valign=bottom style='width:330.75pt;border:none;padding:0cm 0cm 0cm 0cm'>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:10.0pt;font-family:"Trebuchet MS","sans-serif";color:#91897E'>Telephone:
+1 630 687 1950<br>
Mobile: +44 (0)7800 593 604<br>
Skype: richard.leftley<br>
Email: <a href="mailto:richard.leftley@microensure.com"><span
style='color:#91897E;text-decoration:none'>richard.leftley@microensure.com</span></a><br>
Web: <a href="http://www.microensure.com"><span style='color:#91897E;
text-decoration:none'>www.microensure.com</span></a><o:p></o:p></span></p>
</td>
<td width=239 valign=bottom style='width:179.25pt;border:none;padding:0cm 0cm 0cm 0cm'>
<p class=MsoNormal align=right style='text-align:right'><span
style='font-size:10.0pt;font-family:"Trebuchet MS","sans-serif";color:#91897E'><img
border=0 width=239 height=81 id="Picture_x0020_1"
src="cid:image001.gif@01C9B37F.0261C470"
alt="http://www.microinsuranceagency.com/brandstationary/emailgen/microensure_logo.gif"><o:p></o:p></span></p>
</td>
</tr>
</table>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:blue'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Trebuchet MS","sans-serif";
color:blue'><o:p> </o:p></span></p>
<div style='border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0cm 0cm 0cm'>
<p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>From:</span></b><span
style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>
microinsurancefocus-bounces@microfinance.lu
[mailto:microinsurancefocus-bounces@microfinance.lu] <b>On Behalf Of </b>Jim
Roth<br>
<b>Sent:</b> 01 April 2009 23:21<br>
<b>To:</b> microinsurancefocus@microfinance.lu<br>
<b>Subject:</b> Re: [Microinsurancefocus] Microcare in financial crisis<o:p></o:p></span></p>
</div>
<p class=MsoNormal><o:p> </o:p></p>
<p class=MsoNormal style='margin-bottom:12.0pt'>I received earlier today an
unsolicited letter from "Fnu Snu" with a negative newspaper
article from New Vision attached. I sent a reply asking who Fnu Snu is and why
they sent me this unsolicited email. I received no response. My suspicion is
that this letter and its contents are malicious. I am reasonably well
acquainted with Microcare and the information contained in the newspaper is
considerably at variance with my own knowledge of Microcare and its
status. I look forward to reading Microcare's reply to what appears to be the
systematic, unsolicited and anonymous spreading of dubious information. I
should add that I don't have a lot of knowledge about the local papers in
Uganda; but I am not inclined to believe in the verification procedures or
propensities of a newspaper that today moved on
to campaign for outing gay priests.<br>
<br>
<br>
<br>
<o:p></o:p></p>
<div>
<p class=MsoNormal>2009/4/1 Fnu Snu <<a href="mailto:snu_fnu@yahoo.com">snu_fnu@yahoo.com</a>><o:p></o:p></p>
<div>
<div>
<div>
<p style='margin:0cm;margin-bottom:.0001pt'><b><span style='font-family:"Trebuchet MS","sans-serif"'>Microcare
in financial crisis</span></b><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>By
Barbara Among, New Vision Uganda</span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>MICROCARE,
Uganda’s biggest health insurance company, has been struck off the list
of licensed insurance companies. The company, that covers 70,000 people in a
network of 157 health facilities across the country, is facing a financial
crisis, in which over a dozen health service providers are demanding over sh2bn
in unpaid bills. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>The
health providers on Wednesday filed a case in the High Court, seeking to wind
up the company.</span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>In
a public announcement on February 27, 2009, the Uganda Insurance Commission
drew a list of authorised insurance companies and warned the public against
dealing with unlicensed insurers, insurance brokers, agents, loss adjusters,
assessors and insurance surveyors. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>The
commission listed five life insurance companies, 18 life insurance brokers as
well as 19 non-life insurance companies, non-life insurance brokers. Microcare
Insurance Limited never featured on any of the lists.</span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>The
Commission’s acting boss, Evelyn Nkalubo-Muwemba, said Microcare,
incorporated in Uganda in June 2004, had failed to meet some licensing
requirements. “But as soon as the company meets this, we will licence
it,” she said.</span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>For
a company to be licensed, Nkalubo-Muwemba explained, it should have met
criteria such as the sh1b security deposit with Bank of Uganda, sh2.5b in case
of reinsurance business, approval by the insurance association, the COMESA
yellow card requirement, authorised share capital and paid up share capital. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>Microcare
however insisted that they have complied with all the Commission’s
requirements for the renewal of their license.</span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>“The
Uganda Insurance Commission has not revoked or stopped Microcare from
transacting insurance business,” said the marketing manager, Clare
Tumwesigye.</span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>“It
should be noted that it is normal for a company not to be advertised if the
regulatory body is still pursing some administrative processes. We are in touch
with the commission regarding our license of 2009 and would not like to divulge
the details of our discussions but you are free to inquire from it (the
commission) if we have been stopped from transacting insurance business,”
she added.</span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>Tumwesigye
dismissed allegations that they owe health service providers billions of
shillings.</span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>She
said: “Microcare handles volumes of data processed every day and this is
bound to cause friction some times, which leads to reconciliation meetings of
accounts, which is what we are doing with some clinics. We do not want to
discuss our service providers’ business in the press. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>Investigations
by Saturday Vision however revealed that some of the health service providers
have suspended their services to patients under the Microcare health insurance
scheme. Some of the clinics have also either taken legal action or are planning
to do so to recover the money the health insurance owes them.</span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>The
first client to drag Microcare to court was Kadic Hospital in Bukoto, for non
payment of up to sh150m, allegedly accumulated over three years. Microcare has
since paid sh60m, leaving a balance of sh90m. The company also owes Case
Clinic, sh700m, Paragon Hospital, sh770m, Mulago Hospital private wing, sh180m
and Kampala Family clinic sh60m. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>Others
are Gulu Independent Hospital, sh150m, Mbarara Community Hospital, sh67m, St.
Catherine Clinic, sh108m, Byansi Clinic, Masaka, sh8m and Rubaga Hospital,
sh30m. Gulu Independent Hospital is the latest on the list to serve the company
with a notice to sue. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>Also
owed unspecified amounts are Nsambya hospital, Bugolobi nursing home, SAS clinic,
Mayanja Memorial Hospital, Pan Dental Surgery, Victoria Medical Centre and
Nakasero Hospital among others. The other service providers that have suspended
their services with the company over unpaid bills include Abii Clinic and
Laboratory Services, Victoria Medical Centre and Friecca Pharmacy in Wandegeya.</span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>The
Microcare financial crisis comes at a time when the Government is planning to
introduce a Social Health Insurance Scheme. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>Ten
of the affected health service providers have engaged Kizito, Lumu and Company
advocates of Kampala seeking protection from the Uganda Insurance Commission.
The health service providers have also filed a case at the High Court seeking
to wind up Microcare.</span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>Five
companies acting as one </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>Health
service providers are complaining that there are five companies using the name
Microcare and acting as one entity. A look through the letters sent or
agreement signed between several companies and Microcare, spells different
names. There is Microcare, Microcare Health, Microcare Health Ltd, Microcare
Insurance and Microcare Insurance Ltd. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>The
health service providers now fear that the company could easily close shop
without paying what is due to them. “The Uganda Insurance Commission
should inform us and the general public which company is registered under the
laws of this country with the Insurance Commission to offer insurance cover to
the public so that the public and other companies are protected from becoming
victims as our clients are, currently,” the lawyers demanded.</span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>To
compound their worry further, the service providers said they do not know
whether it is a registered insurance company since its files went missing from
the registrar of companies. Further complicating matters are clauses in
the agreement signed between health service providers with Microcare, which
prevents them from directly reaching to Microcare clients. It also stipulates
that Microcare has the right to reject a bill if the drug provided for is not
agreeable to them, if doctor exaggerates a bill and when a hospital treats
congenital illness. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>“In
accordance with the agreements, our clients have fulfilled their part and to
their dismay, the insurance company has consistently failed to honour their
part,” the lawyers complained to the Commission. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>They
claimed that Microcare has placed the bills under quarantine, instead of paying
them. This, they said, was a breach of contract. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>However,
Microcare blames the delay in settling bills on incorrect or exaggerated bills.
The hospitals dismissed this accusation. They said the Microcare desk at
hospitals and clinics verifies the bills before any treatment is provided. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>Affecting
Operations </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>Saturday
Vision has learnt that a number of private health centres wallow in debt, some
of them resulting from heavy borrowing forced on them after insurance firms
delayed to settle medical bills. Some facilities have either scaled-down their
operations, are contemplating shutting down, or are shopping for investors to
re-capitalise and resuscitate the businesses.</span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>The
Microcare mess is just one of the troubles facing health service providers.
Several botched medical insurance schemes and expensive bank loans have pushed
a number of up market private hospitals into financial difficulties. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>For
instance, the Uganda Revenue Authority (URA) recently almost closed down Kadic
Hospital in Bukoto. The URA also raided the accounts of Paragon Hospital due to
non-remittance of PAYE, exceeding sh79m. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>“You
send a bill of sh15m, they give you only sh8m. Each time you send them a bill,
they retain a certain fee and eventually you find the bill accumulating,”
said an executive director of a hospital. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>Hospitals
and clinics complained that these companies take several months, at times
years, before settling their bills. The general contract with insurance
companies is that they pay within 30 days of submitting an invoice, but many
insurance companies take as long as 4-6 months before paying. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>In
turn, the hospitals borrow from banks at high interest rates to meet
operational costs. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>Weak
health insurance sector </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>The
scrapping of Microcare leaves only two companies, Medicare (under East African
Underwriters) and Liberty (under Standard Bank Group of South Africa that
trades here as Stanbic) licensed to provide medical insurance. </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'> </span><o:p></o:p></p>
<p style='margin:0cm;margin-bottom:.0001pt'><span style='font-family:"Trebuchet MS","sans-serif"'>There
are also Health Maintenance Organisations (HMOs) that operate in a way similar
to health insurance companies – taking funds from individuals and
companies to provide medical services in the long-term. Currently there are
five HMOs in Uganda: Africa Air Rescue (AAR), International Health Network
(IHN), International Air Ambulance (IAA), Kadic Health Foundation (KHF) and
Case Medicare. However, their services are not regulated by any law. </span><o:p></o:p></p>
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