IRDAI master circular a major boost for health insurance biz
It has enhanced the rights of the policyholders in terms of claim settlement and plan benefits
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Insurers shall endeavor to cover technological advancements and treatments in their productsincluding the latest procedures like robotic surgeries, oral chemotherapy, stem cell therapy, and immunotherapy
A master circular was issued this week by Insurance Regulator and Development Authority of India (IRDAI) on health insurance. These were addressed at making health insurance available to all even for those with disabilities and health conditions in a seamless manner than the existing one. It also enhanced the rights of the policyholders in terms of claim settlement and plan benefits, etc. The circular shall come into force with immediate effect except for provisions where the effective date is specified.
Some of the major changes to the policy:
• Insurers are required to make available products/add-ons/riders to provide wider choice to the policyholders/prospects catering to all ages, with all types of existing medical conditions including chronic conditions.
• It needs to include all types of systems of medicine and treatments including allopathy, Ayush, etc with every situation of treatment including domiciliary hospitalisation, outpatient hospitalisation (OPD), day care and homecare treatments.
• Further the regulator has directed to allow flexibility of customisation of products by choosing riders/add-ons, etc suiting the policyholders’ medical conditions.
• Insurers shall endeavor to cover technological advancements and treatments in their products. This could include the latest procedures like robotic surgeries, oral chemotherapy, stem cell therapy, immunotherapy and other treatments. And all the products are to be made available in compliance with various laws including, the Surrogacy (Regulations) Act, 2021, the Mental Healthcare Act, 2017, etc.
A document, in a prescribed format is provided by the insurer along with the policy copy that explains in simple words, the basic features of a policy at one place i.e., Customer Information Sheet (CIS). Acknowledgement in physical or digital will have to be obtained from the policyholder. On request, CIS will be made available in local language.
Free look period of 30 days from the receipt of the policy document is available to the policyholder to review the terms and conditions of the policy. Another major change is brought through the cancellation of the policy. The policyholder may cancel their policy at any time during the policy period by giving 7 days of notice to the insurer. A refund proportionate premium for the unexpired policy period if the term of the policy is one year and with no claim made during the period.
Grace period of 15 days in case of monthly installments and 30 days where the premium is paid in quarterly/semi-annual/annual modes is available from the premium due date. Importantly, the coverage will be available for the grace period also, if the premium is paid in installments. The insurer can’t deny the renewal of the policy on the grounds of claims made except those of fraud and in case of discontinuation of the products, the insurer shall provide suitable options to the policyholder to migrate as per the already established procedures. Also, the insurer shall not resort to fresh underwriting unless there’s an increase in sum assured.
In case of migration from one plan to other (including under family & group cover) with the same insurer then the policyholder can transfer the credits gained to the extent of the sum assured.
The moratorium period on the policy has been reduced to 5 years from 8 years. No policy and claim shall be contestable on any grounds of non-disclosure and/or misrepresentation except for established fraud after the completion of the moratorium period. The insurers may reward the policyholders for their no claims by either increasing the sum assured or providing discounts in the renewal premium. While the 100 per cent cashless claim settlement is strived, insurer shall decide on the request for cashless authorisation immediately but no more than one hour of receipt of request. The required infrastructure must be established before July 31, 2024. Moreover, insurer has to provide the final authorisation for discharge from the hospital within three hours from the receipt of request from the hospital.
The IRDAI has prohibited issuing indemnity-based policies and directed the insurers to issue only benefits-based ones. It allows to claim a fixed sum upon the diagnosis of a covered disease. The policyholder can file for claim as per their choice under any policy. In case the coverage under the said policy is less than the admissible claim amount, the chosen insurer shall seek the details of other available policies of the policyholder to ensure settlement of balance amount as per the policy conditions.
The insurer is required to have a robust system of grievance redressal process. A penalty of Rs 5,000 per day shall be payable to the complainant in case of not honoring the award from the Insurance ombudsman. The regulator has also asked the insurers to formulate a specialised channel to handle complaints of senior citizens. Thus, bringing these major changes, the regulator has paved a way for product innovation, standardisation of claim settlement and remove uncertainty over insurance availability.
(The author is a co-founder of “Wealocity”, a wealth management firm and could be reached at [email protected])
