IRDAI Proposes Health Insurance Amendments
IRDAI proposes lifelong renewability of personal accident covers, time-bound porting of policies, among others.
From extending lifelong renewability of personal accident covers to discount on renewal premiums and time-bound porting of policies, the IRDAI has proposed amendments to health insurance regulations to benefit policyholders.
According to the draft issued by the Insurance Regulatory Development Authority of India on Feb. 16, an insurer can’t deny lifelong renewal of a personal accident cover on the grounds of policyholder’s age, provided it has been earlier renewed without a break. Previously, such covers were a part of an exclusion list.
Bahroze Kamdin, partner with Deloitte India, said this is a very positive development for policyholders who regularly renewed their personal accident covers only to one day be suddenly denied renewal because of a change in their age bracket. “Accidents don’t have much to do with age and it’s great that the proposed regulation is now taking steps to recognise it.”
Discount On Renewal Premiums
The sector regulator has also proposed to include the word ‘discount’, besides ‘loading’, on renewals of existing health policies to encourage insurers to grant reductions in premiums on renewal in case of improvement in risk profile. Loading is top-up for risk and age on renewal.
Existing provisions only provided for loading on premium on policy renewal that could be removed if risk lowers. Assuming there was no loading for risk on existing policy, discount for lower risk can be provided now with the proposed change, Kamdin said.
Prawal Kalita, managing director, leader-Mercer Marsh Benefits, Marsh India Insurance Brokers Pvt., told BloombergQuint that “over the past two years, the Indian regulator is consistently issuing guidelines in regards to incentivising good health. These guidelines reinforce that by encouraging insurers to offer discounts on the improvement of risk profiles.”
While this is a positive move for cover with care, Kamdin said the “implementation guidelines on discount calculations would be awaited”.
Non-Repudiation Of Claims And Time-Bound Portability
In January 2020, the IRDAI had introduced guidelines on portability of health insurance policies. That allowed all individual indemnity health insurance policyholders, including family floater policies, to migrate to a new insurer.
For policyholders wishing to port to a new insurance provider, the modified regulation ensures that no subsequent claim related to that already made with the existing insurer shall be rejected by the new insurer under “non-disclosure” clause after portability.
The insurance company is also required to obtain all necessary details of medical history and claim history of the policyholder concerned from the existing insurance company through the web portal of the IRDAI within five days, thus making it time-bound unlike in the past.
According to Kamdin, by prescribing timelines to obtaining medical history/claim history from existing insurer, the regulator is trying to prevent the porting-in insurer from refusal of porting or claiming non-awareness and rejecting claims.
Exclusion Of Minimum Group Size Mandated For Obtaining Group Health Cover
From a minimum group size requirement of seven, the IRDAI has proposed that the group health insurance policy may be offered based on guidelines specified from time to time.
With the growth and development of the micro, small and medium enterprise sector and emergence of startups in India, the regulator has taken a positive step towards this by removing hard-coding of norms on the minimum number of lives, Marsh India’s Kalita said.
Revision In Cashless Facility Clause
The IRDAI has proposed rewording of the clause that caters to cashless facility being made available at network providers. While the current regulations mandate bipartite/ tripartite agreements by insurers with network providers (hospitals or clinics and such other establishments), the revision proposes to shift the onus of ensuring availability of cashless facility by insurer without prescribing a specific manner to do so.
That, Kalita said, promotes increased cashless utilisation.
Most of the other proposed changes relate to operational matters of insurers and therefore, certain past regulations are proposed to be omitted from the act.
The regulator has invited comments on the draft until March 6.