With the Insurance Regulatory and Development Authority (IRDA) issuing final guidelines on health insurance portability, clarity has emerged on various contentious issues.
According to the guidelines, a policyholder will have to approach an insurer 45 days before his policy with the old insurer expires, to enable the new company consider his application. In a circular, the IRDA said that the acquiring insurer will verify the claims history from the common database, which will have two years of claims experience.
Based on the data, the acquirer will decide whether to accept the proposal and at what price. Commenting on the IRDA circular, Subrahmanyam B, vice-president & head, health vertical, Bharti AXA General Insurance, said: “The guidelines have gone a long way towards clarifying some of the issues which were raised earlier by insurance companies.” He told FE that portability shall be allowed in respect of individual health policies (including family floater policies) issued by non-life insurance companies.
Exchange of information between the two insurers shall be done within 14 working days and the final decision communicated to the policyholder within 15 days thereafter. Individual members covered under group health policies shall have the right to migrate to individual policies issued by the same insurer and the option of porting their policies to another insurer one year thereafter.
The old insurer will be bound to provide additional data to the new insurer within seven days of the receipt of the application and the new insurer will have to respond to the proposal within 15 days. If it fails to do so, the new insurer will be bound to accept the proposal.
Shreeraj Deshpande, head, health insurance, Future Generali India Insurance Co, says the revised guidelines will lead to stiffer competition.
Portability will also benefit those who are covered under a group policy provided by their employer and do not have any individual policy of their own.