The Insurance Regulatory and Development Authority of India, also known as IRDAI, has recently implemented significant reforms in the health insurance sector. IRDAI operates as an independent and statutory organization with the mandate to oversee and govern the insurance and reinsurance sectors in India.
The regulatory body has implemented various significant rule modifications to enhance the rights of policyholders, such as decreasing termination fees in indemnity-focused health insurance plans, outlining protocols for granting a no-claim bonus, and enhancing the transparency of claim settlement procedures.
Streamlined renewal process – Insurers are no longer allowed to deny policy renewal based solely on a previous claim. Moreover, insurers are restricted from initiating new underwriting procedures, such as evaluating your health and setting policy conditions, unless you specifically ask for a coverage increase. These adjustments are intended to streamline the policy renewal process for policyholders.
Penalties for non-compliance with ombudsman decisions – Insurance companies must adhere to the directives of the insurance ombudsman within a 30-day period. If they fail to do so, they will incur penal interest. Furthermore, insurers will be obligated to pay ₹5,000 per day to the policyholder if the ombudsman’s rulings are not executed within the specified timeframe. These actions are designed to guarantee that insurers follow ombudsman judgments promptly.
Insurance for all – Insurers must now provide a range of products that meet the needs of individuals across all age groups, those with different pre-existing conditions, and disabled individuals. Furthermore, policies should encompass outpatient department (OPD), daycare treatment, and home care treatment. Comprehensive coverage should also extend to advanced surgeries. Nevertheless, the issue lies in the fact that policies offering such extensive coverage tend to come with higher price tags. Overcoming this pricing obstacle would enhance the advantages of these new adjustments for policyholders.
Accelerated cashless claims processing – Commencing on July 1, 2024, health insurance providers must make determinations on cashless treatment requests within a one-hour timeframe. Presently, individual insurance companies have varying policies concerning the processing time for cashless requests and claims, resulting in disparities in the speed at which these requests are addressed.
Faster claim settlement upon discharge – Insurance companies must finalize the cashless authorization at discharge within 3 hours of receiving the bills. If the approval is delayed beyond this timeframe, the insurer will be liable for any extra charges imposed by the hospital.
Emphasis on simplifying policy details – Insurance companies must now furnish a Customer Information Sheet (CIS) that outlines the key terms and conditions of the policy in plain language. This effort is designed to enhance policyholders’ comprehension of their insurance coverage.
Enhanced transparency in claim rejection process – Claim rejections will now undergo review by a 3-member panel from the product management committee, instead of being determined by a sole individual. This adjustment is intended to enhance transparency and mitigate the occurrence of arbitrary claim rejections frequently faced by customers.
Protection against rejection after 5 years – After a span of 5 years of uninterrupted coverage, insurance companies are not allowed to deny claims for unjustifiable reasons. Claims can only be denied if insurers can prove that the policyholder has engaged in fraudulent activities. This measure is intended to offer policyholders greater assurance and trust in the legitimacy of their claims.
Rewards for claim free years – In motor insurance,If no claim is made, the premium for the following year will be reduced. In the past, unclaimed bonuses in health insurance were typically added to the coverage or sum insured. However, the IRDAI is introducing changes to offer policyholders the option to either receive increased coverage or pay a lower premium when renewing. This new choice is particularly advantageous for individuals dealing with higher premiums, especially in the wake of COVID-19.
Reduction in cancellation charges -Policyholders have the option to terminate their health insurance coverage by giving their insurer a 7-day notice. In the event that no claims have been filed, the insurer will reimburse a portion of the premium for the remaining policy term. In the past, the fees for cancelling a policy were much steeper, resulting in a more expensive process for policyholders looking to end their coverage prematurely.
Ultimately, the recent modifications implemented by IRDAI within the health insurance industry signify a substantial advancement in improving the overall insurance journey for policyholders. These modifications encompass expedited cashless claim procedures, lowered cancellation fees, heightened clarity in claim denial procedures, and an emphasis on streamlining policy details.
Furthermore, the focus on ensuring insurance coverage for everyone, irrespective of age or existing health conditions, as well as including advanced surgical procedures in the coverage, shows a dedication to enhancing the inclusivity and accessibility of insurance. Despite obstacles like the cost of comprehensive coverage, these adjustments represent a favorable step towards realizing the objective of “Insurance for All” by 2047.Read More
