IRDA Health Insurance Regulations

The Insurance Regulatory and Development Authority of India has made some changes in the health insurance guidelines in 2016 to address the changes taking place in the health insurance sector. The aim of doing these changes is to increase transparency and satisfy customer needs.

On 12th July 2016, the Insurance Regulatory and Development Authority of India has announced a set of Health Insurance Regulations which leaves a positive impact for insured individuals to replace the last set of regulations that were set in 2013.

Updated health insurance guidelines are as follows:

Health insurance companies can offer Pilot Products

To make it easier for insurers to offer innovative products and features to the customers, IRDA’s new regulations governing Health Insurance allowed the health insurance companies to offer Pilot products. It is given to the policyholder for up to 5 years, following the expiry of which, the products will start functioning as a regular health insurance plan.

Secondly, to continue the pilot product for 5 years is dependent on the feasibility of the health insurance company. If the product is feasible, then it will transform into a regular health insurance policy at the end of 5 years, and in case, it is not, then the company can freely discontinue the Pilot Product before also.

Data Disclosure to improve transparency

The new regulations which are effective from the year 2016 improve the data disclosure and bring transparency in the health insurance industry. Along with the repudiated claims, the insurer has another category i.e. closed claims. It includes claims which could not be paid back due to incomplete documentation or failure on the part of the policyholder. Higher is the number of closed claims, more the insurer can project a lower percentage of rejected claims. According to the new regulations, the insurer cannot put the claim status as ‘ closed’ in their books.

Give discounts to early buyers and health-conscious customers

All those individuals who buy a health insurance policy at an early age or practicing wellness or wellness habits will get a benefit in the form of discounts in premium and/or on medical services like diagnostics, consultation, or pharmaceuticals which are a part of the network. To motivate and increase awareness regarding the importance of health insurance among the people, this is being included in the new guidelines.

Loan/Credit Linked Health Insurance

Term insurance is based on the existing credit or loan offered by the insurance providers. The benefits offered under these plans, based on the condition i.e. the death of the insured, and their nominee who will utilize the claim amount of the policy to pay back the loan. These policies, however, do not give any option, in case, the insured falls ill or unable to repay the loan amount, or in case of the sudden medical expenses incurred towards the illness. 

No commission for agents from portability

As per the new guidelines set for the health insurance by IRDA, the insurance agents will not earn any commission for the cases where the customer is going for health insurance portability which includes the portability of your mobile number or to carry forward the benefits of your existing health insurance policy such as pre-existing conditions, accumulated bonuses, waiting period, etc. over to the new policy.

No indemnity products allowed to offer further

As per this new regulation, the life insurance provider is not allowed to offer indemnity products to the customer after July 2016. All those customers who hold indemnity products will continue to have them until the respective policy expires. To meet the expected claims raised by such policies, insurers have created adequate reserves. 

This is done to ensure that the existing policyholders will not suffer in terms of policy servicing and claims processing.

Avail of the benefits of combo Plans which comprises of any life & health plan.

According to the new IRDA Health insurance regulations, health insurers can offer combi-plans which can be a hybrid of any health and life (endowment, money-back, or ULIP) plan.