Chennai, June 3 (IANS) The Tamil Nadu government's announcement Friday to scrap the existing group health insurance scheme for the poor in favour of much more comprehensive cover is likely to hit the city-based health insurer, Star Health and Allied Insurance Company Ltd.

 
 The company earns a major portion of its premium from the state government scheme launched in 2009.
 
 Tamil Nadu Governor Surjit Singh Barnala, in his address to the 14th Tamil Nadu assembly's first sitting, said the AIADMK government has decided to scrap the Kalaignar Insurance Scheme and go in for much more comprehensive policy.
 
 According to a state government official, around Rs.600 crore was the premium outgo under the Kalaignar Insurance Scheme to cover the around 1.4 crore below the poverty line (BPL) families in the state.
 
 The premium per family is Rs.469 for a value of Rs.100,000 for four years.
 
 Reacting to the government's decision, Star Health's chairman and managing director V. Jagannathan was unfazed.
 
 "We are insurers. We work for the pleasure of the insured," Jagannathan told IANS.
 
 He declined to comment further about the likely impact the government's decision would have on the company.
 
 However, company sources said there will be an impact, but it will not be major as the company's  premium share is only around 40 percent and the balance is given to other co-insurers.
 
 Under co-insurance contracts, the claims will be shared in the ratio at which the premium is shared amongst several insurers.
 
 According to company officials, the government' move will further propel the company to go in favour of more retail business.