IRDAI consolidates changes in health insurance rules covering renewal, portability, senior citizens

The insurance regulator, IRDAI, has issued consolidated health insurance guidelines amended up to May 12, 2020 covering important areas such as renewal, portability and special provisions to protect senior citizens. These guidelines include: (i) Health insurance policy holders must be offered an alternative to switch to in case the policy they hold is changed or they reach the exit age; (ii) No charges to be levied for porting of policy (iii) Easier claim rules for those holding two health insurance policies.

Amit Chhabra, Head-Health Insurance, Policybazaar.com said that in the recent times, the regulator has made several amendments to make the insurance products more customer-centric and today’s guideline is consolidated list that has been introduced to basically avoid confusion regarding what is being omitted and what is being included after the changes announced earlier. "Having a consolidated list of all the amendments will be beneficial for all and will provide clarity to both - customers and the insurers. Also, we can say that this will be considered as a reference document on which the further amendments in the insurance products could be based on. Summarising it, IRDAI has taken some really wonderful steps to transform the Health Insurance ecosystem in India. This compilation highlights all these steps," he said.

Some of the important points that have been consolidated in these guidelines are as follows:

Underwriting of health insurance products

According to the Insurance Regulatory and Development Authority of India (IRDAI) guidelines, general and health insurers may devise mechanisms or incentives to reward policyholders for early entry, continued renewals (wherever applicable), favourable claims experience, preventive and wellness habits. These incentives/mechanisms etc should be disclosed upfront in the prospectus and the policy document, by complying with the norms specified under Product Filing Procedure Guidelines. The guidelines add that what is proposed to be covered as part of wellness habits and preventive habits should be clearly defined in every insurance product.

The insured shall be informed in writing of any underwriting loading charged over and above the premium as filed and approved under the Product Filing Guidelines and specific consent of the policyholder for such loadings shall be obtained before the issuance of a policy, say the guidelines.

Renewal of health policies issued by general insurers

As per these guidelines, the renewal premium shall not be accepted more than 90 days in advance of the due date of the premium payment.

Migration of health insurance policy

According to the IRDAI circular, General insurers and health insurers offering indemnity-based health covers shall offer an option to the policyholders to migrate to a suitable alternative health insurance policy available at the time of modification or withdrawal of the policy. Further, indemnity-based health covers offered to specific age groups, students, children under family floater policies, shall also offer an option to such lives to migrate to a suitable alternative health insurance policy available at the specific exit age. Every policy migrated shall be allowed suitable credits for all the previous policy years, provided the policy has been maintained without a break.

The norms on migration and portability of all policies issued by general insurers and health insurers shall be subject to the guidelines as may be specified by the Authority from time to time, as per the circular.

Special provisions for senior citizens

The premium charged for health insurance products offered by Life Insurers, General Insurers and Health Insurers to senior citizens shall be fair, justified, transparent and duly disclosed upfront, say the guidelines.

Multiple policies

Balance claim or claims disallowed under the earlier chosen policy/policies may be made from the other policy/policies even if the sum insured is not exhausted in the earlier chosen policy/policies. The insurer(s) in such cases shall independently settle the claim subject to the terms and conditions of other policy / policies so chosen, as per the guidelines.

Portability of health insurance policies

In order to accept a policy which is being ported in, the insurer shall not levy any additional charges exclusively for the purpose of porting, as per the circular, say the guidelines.

AYUSH coverage

All insurers may endeavour to provide coverage for one or more systems covered under "AYUSH treatment" provided, the treatment has been undergone in the hospitals or healthcare facilities subject to the guidelines as may be specified by the Authority from time to time.

Wellness and preventive aspects

Insurers may endeavour to promote wellness amongst policyholders of health insurance as per the guidelines as may be specified by the Authority from time to time, as per the circular.

Source: The Economic Times