Standardised IRDAI Guidelines For Health Insurance

Health Insurance

The Insurance Regulatory and Development Authority of India (IRDAI) is a regulatory entity that supervises India’s insurance sector. IRDAI’s primary purpose is to protect a policyholder’s interest and boost the insurance sector in India. A health insurance policy offers customised coverage for expenses arising out of various medical emergencies. Here are the IRDAI guidelines for health insurance policies. Read on!

About IRDAI

Before delving into IRDAI (Insurance Regulatory and Development Authority of India) guidelines for health insurance, it is crucial to know more about the entity. IRDAI is a regulatory body operating under the Finance Ministry of the Government of India. As stated earlier, the entity regulates and provides licenses to insurance companies in the country. IRDAI Act 1999, passed by the Indian Government, led to the formation of this body. Currently, Mr Subhash Chandra Khuntia is the chairperson of IRDAI.

Functions of IRDAI

IRDAI has a significant role in regulating and monitoring insurance policy companies under Section 14 of the IRDAI Act, 1999. Some of its essential functions are as follows:

• To make sure that the applicants get the registration certificates and services related to insurance policies in case of modification, renewal, withdrawal, suspension and cancellation.
• To safeguard the interest of the policyholders with regard to nominations, claim conditions, payable interest and other terms and conditions of the insurance.
• To specify the required qualifications, code of conduct and training instructions for the insurance intermediaries or agents.
• To clearly explain the code of conduct to the surveyors as well as to the assessors.
• To ensure the orderliness and proficiency of the insurance business.
• To impose charges or fees on insurance providers who carry out the business.
• To organise audit, enquiry and investigation of the insurance intermediaries, agents and organisations connected with the business and call for undertaking and information of the same.
• To regulate and monitor the rates, benefits, terms and conditions available to the insurers in reference to the general insurance business and not controlled by the tariff advisory committee under Section 64U of the Insurance Act, 1938.
• To specify the ways in which the books and records of accounts are to be provided by insurance companies.
• To maintain the investment funds of the insurance companies.
• To maintain regulation of the maintenance of the margin solvency.
• To resolve the disputes among the insurance intermediaries and insurers.
• To levy a percentage of premium income on the insurers, which will be used to promote and regulate the professional organisations.
• To frame laws recurrently in order to remove any obscurity in the insurance business.
• To take reasonable action where the applicable standards of business are not maintained or not applied effectively.
• To grant, modify or suspend licences of the insurance companies.
• To perform any other function as may be prescribed under the IRDAI Act. 

Standard IRDAI Guidelines for Health Insurance

• Any medical insurance must be designed with the sole objective of maintaining and improving good health.
• As part of a wellness promotion initiative, insurance firms can offer reward points to an insured who meets or complies with set criteria of preventive and wellness features.
• It will not be possible to offer any preventive and wellness service without filing or incorporating a part of the product per the Product Filing Guidelines. 
• In a policy, any preventive/wellness and preventive feature can get offered as an optional or add-on cover.
• There must not be any discrimination in offering any preventive and wellness feature or granting any reward points to wellness to the similarly placed categories of insured persons using a specific medical insurance plan.
• All insurance providers must evaluate the impact of pricing of the wellness and preventive features as offered to policyholders. Therefore, insurance providers must reveal the same upfront in ‘File and Use’ or ‘Use and File application’, as mentioned in Product Filing Guidelines.
• Based on wellness and fitness criteria, insurance firms can promote wellness amongst health insurance policyholders by providing below mentioned services: 

Particular health-related services offered by network hospitals or service providers –

1. Pharmaceuticals
2. Outpatient treatments and consultations
3. Medical tests or diagnostics

IRDAI Guidelines for Health Insurance Claim Settlement

When it comes to health insurance claim settlement, the IRDAI has put the following guidelines in place:

• Claim contest
  A policyholder cannot contest any claim after 8 years of raising the same.  

• Claim settlements
  During a delay in the claim settlement process from the insurance providers, the company will have to pay interest on the claim amount up to 2% more than the current bank rate. IRDAI directs the insurance firm to settle a claim within 30 to 45 days max, considering the date of providing the last document required for such a claim. The time duration will also vary with the nature of a claim.

Note: The above IRDAI guidelines for health insurance claim settlement apply to insurance plans purchased from 1^st October 2020. 

Also Read: Waiting Period In Health Insurance: What Is It & Why Is It Important?

Benefits of the New Guidelines to Health Insurance Policyholders

The new guidelines declared by IRDAI in 2020 aim to improve the experience of the health insurance policyholders. It focuses on various aspects such as claim settlement, use of various policies and portability.

Following are the benefits of the new guidelines to health insurance policyholders:

• Inclusion of new health conditions, diseases and modern treatment methods
• An insured person holding multiple insurance policies can now apply for claims under multiple insurance policies, and the insurer is liable to settle such claims adhering to the terms and conditions of the policy. The same is applicable in case of exhaustion of the sum insured under one policy.
• A policyholder can now choose to migrate to another plan of the same insurer or to a new insurer altogether in case he/she is not satisfied with services provided under the current policy.

Rights of Policyholders under the New Regulations by IRDAI

As a smart and responsible policyholder, you should be aware of your rights under the new guidelines set by the IRDAI.

You have the right to:

• Cancel an insurance policy within 15 days from the date of receipt if you do not agree to any term or condition as provided by the insurer. You have the option to cancel the policy during the “Free Look” period considering that the term of the policy is a minimum of three years. You can reject the policy stating the reason for the same, and get a refund of the premium amount paid.
• A reasonable risk premium for the period on cover, the cost spent by the insurer on medical examinations and stamp duty charges will be deducted from the refund amount.

If it is a Unit Linked Insurance Plan (ULIP),

• You can repurchase the units at the specified price on the date of cancellation.
• You are eligible for partial withdrawal or switching of funds.
• You can decide to give up the policy after the lock-in period from the date of the beginning of the policy.
• The assignee or nominee has the right to the death claim amount.
• You can ask for modifications in the policy such as mode of premium payment, increase in sum insured or tenure of the policy. 

List of IRDAI-Approved Benefits for Insurers 

• Vouchers that you can redeem to obtain health supplements. 
• Vouchers that you can redeem for membership in sports clubs, yoga centres, gyms, fitness centres, etc. 
• Discounts on premiums or increase in sum insured amount during renewals based on the wellness regime adopted by insured persons in the previous policy period. 
• Cost of treatment coverage of any valid claim related to non-payable items as mentioned under the policy’s terms and conditions.
• In case of more than one reward, policyholders must have an opportunity to choose a reward based on their needs.
• Insurers do not have permission to publish any logo or trade names of third-party merchandise in insurance ads. They may do the same in generic terms. Insurance firms must disclose specific services or products and various details on their website.
• Insurers can also provide a link to policy contracts and insurance advertisements. 
• If an insurer engages with multiple service providers, insured persons will have the liberty to choose a service provider of their choice to avail of various benefits and services.
• Insurers can expand the list of service providers to offer healthcare benefits. However, health insurance providers shall not accept any liability regarding a product or service quality available with third parties.
• A health insurance provider must mention that the third party in question has the sole responsibility to provide specific wellness services. This means an insurer is not responsible for any flaws or issues in the products offered by a service provider.
• It is an insurer’s responsibility to track and monitor service quality. They must adopt appropriate mechanisms to deliver all obligations as mentioned in a wellness program.
• An insurer must only pay the monetised value of redeemed reward points by a policyholder. It will not make any payment to third-party service providers.
• No consideration amount will get paid to an insurer for offering any third-party services.
• All operational costs for administering preventive and wellness cover services must get presented in the prospectus or sales literature while offering the services.  
• In the case of family floater plans, insurance service providers must clearly state redemption and accrual of rewards for members covered.
• Insurance providers must specify whether the accrued rewards can get carried forward in a policy document. When a policy expires, the accumulating rewards may get carried forward for 3 months.
• An insurer must declare any accrued rewards at periodic intervals along with rates or amounts during policy commencement. No rewards will have a link to dynamic factors such as interest rates.
• Insurers must notify all accumulated rewards to an insured person’s credit and all their entitlements at least once each year.
• Insurance providers must mention a communication mode to provide notification of various healthcare and wellness services.
• Also, insurance service providers must mention the manner of redeeming accumulated rewards. They must mention these on their website.
• Only health insurance providers will be responsible for any flaws or omissions in the calculation of accrued rewards.  
• All information while offering welfare services as mentioned in a policy must be kept confidential.
• The Authority has the right to reject any wellness service as proposed by an insurer if it is against the interest of policyholders and is not as per fair market standards. It can also withdraw any wellness or preventive feature if it is non-compliant with the guidelines laid down by the Authority.

Also Read: Cashless Health Insurance Policy: Coverage Of Cashless Medical Insurance & Their Types

Final Word

IRDAI is the supreme Authority that regulates India’s insurance sector to ensure fair business practices and optimum services to policyholders. Hence, before purchasing a health insurance policy, it is crucial for individuals to take a look at the IRDAI guidelines in place to enjoy optimum benefits. 

Further, to avail of the best health insurance plans, individuals can turn to Navi health insurance. With paperless claims, an extensive network of cashless hospitals and such benefits, health insurance policies from Navi can be extremely beneficial. Download the Navi app today to know more!

FAQs on IRDAI Health Insurance  Guidelines 

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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.