On 30th May 2012, IRDA published an exposure draft of IRDA (Health Insurance) Regulations 2012. The exhaustive 44 page new draft regulations for Health Insurance released, reflect IRDA's continued efforts and intentions to "clean up" the grey areas in Health Insurance in India.
Here are the highlights.
- All Health Insurance products henceforth would be renewable for lifetime, without any renewal ceasing age.
- Grace period for renewal of Health Insurance would be 30 days, before which delay of renewal could be condoned by the Insurance Company.
- Health Insurance policies from Life Companies would have a minimum term of 4 years, whereas Non-Life companies could have a maximum term of 3 years.
- Clear procedures specified for smooth migration of children from Floater plans proposed by their Parents, into their own independent plans.
- Insurers would be required to have policy wordings of all their products mandatorily put up on their website. (Yes, there are some good companies which dont have Policy Wordings on their portal)
- Communication of Denial of Coverage, and Loading on fresh Health Insurance proposals should be in writing.
- Separate Claims and Grievance Cell for Senior Citizens.
- Loading on Claims only when individual claims for 3 consecutive years exceed 500% of the renewal premium.
- Health Insurance Customers with multiple insurance policies, would have a choice to choose which product he wants to use. Contribution would be effected between Insurance companies, without involving the customer.
- Standard Definitions, Exclusions, and Forms (like Claim Forms) are expected to be released by IRDA.
- Renewal Procedure (regarding maximum age, changes in coverage at later ages, upgrading cover, loading charges) would have to be clearly detailed in the policy wordings
- Any change in Terms of the policy at the time of renewal need to be communicated with the policy holder 3 months before the renewal date.
- Insurers are required to mandatorily settle claims within 30 days of submission of complete documents.
- Insurance Companies cannot reject claims on technical grounds of delayed submission, if the customer can provide valid reasons for the delay caused.
- Cashless Cards should be issued within 15 days of issue of the Health Insurance Policy. No Fresh cards would be issued every year on renewal. The same cashless card would be continued every year.
- Hospital Network would be the responsibility of the Insurance Company, and not the TPA (which is the case currently) Insurance Companies would be required to make direct agreements with Hospitals. These agreements could be tripartite with the TPA. In short, Insurance Companies would administer the network and would be held responsible for issues that arise in the network. (Since TPAs were originally brought in to primarily administer the network of hospitals, their role after these regulations take effect, would be diluted significantly.)
- Any Change of TPA in a policy should be informed to customer with 30 days of such change. All data should be seamlessly transferred to the new TPA, ensuring there is no hassle caused to the customers.
- These are "draft" regulations issued (not in effect) with the intention of getting feedback and inputs from the industry, including policyholders and their forums. These would be revised in due course, and the final regulations released in 2-3 months.
- These regulations do not affect existing products.