HEALTH INSURANCE ALERT! Insurers hail new guidelines - Check your list of win-win benefits

IRDAI Alert: The Insurance Regulatory and Development Authority of India (IRDAI) has issued a new circular advising the guidelines on the filing of minor modifications to approved individual health products subject to certain conditions. These minor modifications will be allowed on a certification basis without having to go through the regular filing process. In this new circular, insurance companies need not file for permission from the IRDAI for raising or decreasing insurance premiums up to 15 per cent. Subject to certain conditions, the insurer need not take the approval of the IRDAI in changing the sum assured, changing the product name etc. While issuing the new circular, the IRDAI said that its objective behind this move is to standardise and rationalise the exclusions in health insurance contracts.

Speaking on the benefits trickling down to the policyholder Dr. Shreeraj Deshpande, Chief Operating Officer, Future Generali India Insurance said, "The regulator has stipulated that all new products filed effective from 1st October 2019 would be as per these guidelines. All existing products would continue until October 2020, however, insurers would have to withdraw all existing products, which do not conform to these guidelines effective from October 2020. This indicates that the insurance companies will have to revise all existing products to conform to these guidelines before October 2020." Despande said that policyholders should ensure that they personally fill up the proposal forms and disclose all information correctly to the insurance company.

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Expecting transparency in health insurance sector Subramanyam Brahmajosyula, Head — Underwriting & Reinsurance, SBI General Insurance said, “The circulars issued by the regulator will assist in bringing greater clarity in the health insurance space. Apart from the adoption of standard wordings, there are now clear guidelines on what can and cannot be excluded under health insurance policies. Policyholders would also be able to take advantage of modern treatment methods which can no longer be excluded under health insurance policy contracts. These initiatives will make insurance products more customer-friendly by eliminating grey areas in health insurance coverage. We expect that these measures will improve the penetration of health insurance in the medium to long term.”

Following are some of the key features of the IRDAI new guidelines to the insurance companies:

1] Addition of premium payment options in terms of allowing premium payment in installments;
2] Addition of distribution channels. Eg; if a product has been filed with an intent to sell it through agency channel but it is proposed to also offer it to bancassurance channel;
3] Change in premium rates of +/- 15 per cent;
4] Addition of riders or add-ons to the product;
5] Minor changes in policy wordings;
6] Change in name of product;
7] Change in sum insured options;
8] Decrease or increase in minimum and maximum premiums for the product;
9] Decrease or increase in minimum and maximum entry age; and
10] Addition of critical illnesses.

The provisions of the above-mentioned IRDAI guidelines shall be applicable in respect of all health insurance products (Other than Personal Accident, Domestic and Overseas Travel Policies) (both Individual and Group) referred to in Clause (2) above filed on or after 01st October 2019.