IRDAI Proposes Changes to Health Insurance Clauses

The Insurance Regulatory and Development Authority of India (IRDAI) reviewed the 2016 regulations and proposed a few changes to provide operational freedom to both insurance companies and Third Party Administrators (TPAs). And all this is suggested while protecting the interest of policyholders. So, go through this page below and see the changes proposed to health insurance clauses.

What Changes are Proposed by the IRDAI to Existing Health Insurance Clauses?

The IRDAI has proposed the following changes to the 2016 clauses –

Incentives to Policyholders

The new clause for life insurance companies is to provide an incentive to the policyholders for purchasing life cover at an early age, uninterrupted renewals (wherever applicable), valid claims, preventive and wellness habits, etc. These regulations are already applicable for general and health insurance companies.

Discounts on Improving Health Habits

Discounts upon improvement in the risk profile. One’s profile is riskier when there is a history of illnesses and ongoing bad habits like smoking. So, if you have quit smoking, adopted a healthy lifestyle and been exercising daily, the company should thus offer a discount on your premium payments.

Personal Accident Product Offerings

The company should provide personal accident products when someone buys a policy with lifelong renewability. This is proposed taking care of the interests of policyholders. Because one doesn’t visit a hospital for the treatment of illnesses, sometimes, accident-related injury can send you to the hospital too. So, to make you prepared for that, the company must provide a personal account cover with your lifelong health insurance plan.

Omission of Pre-medical Clauses Subject to Insurer’s Approval

IRDAI asks to omit the clause related to the costs of pre-medical check-up examinations. In respect of this, the IRDAI says, ‘These are operational matters, hence considered to be left to the insurers to decide.’ So, if the insurance companies are okay with the omission of pre-medical clauses, the same could be approved and applicable on policies.

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Delete the definition of ‘Health Services Agreement

There is no requirement for a written tripartite or bipartite agreement amongst insurance companies, TPAs and hospitals as per the IRDAI review of the 2016 clause.

Changes Proposed to Cashless Treatment Agreement

IRDAI asks to remove existing rules requiring insurers and cashless hospitalization facility providers and insurers to sign an agreement for cashless treatment. According to the review, this clause is highly prescriptive. Because the insurance company or TPA handles the cashless facility at a network provider. So, there is no need to engage the network providers.

Porting-related Changes

Post the porting of a health insurance policy, the new insurer cannot reject any further claims, which are already made with the previous company, due to non-disclosure. The new insurance company shall prescribe timelines for claim details from the previous insurer after porting.

Disclosure on Company’s Website is Mandatory

  • There should be a disclosure on the company’s website regarding health insurance porting to foster transparency and impart education to the policyholder.

Note – The amendments to health insurance clauses by the IRDAI are open for feedback by stakeholders till 6th March 2022

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