The Insurance Regulatory and Development Authority of India (IRDAI) has recently introduced a host of measures for the health insurance sector, including a mandatory time-bound settlement of policies by insurers, and also explained rules regarding cancellation of policies, renewal, portability and grace period for premium payments by policyholders.

In a circular issued late last month, the regulator asked insurance companies to clear cashless claims within three hours after receiving a patient discharge request from the hospital. The regulator further said that policyholders should not be kept waiting on account of delay in cashless claim settlements.

“Insurer shall grant final authorization within three hours of the receipt of discharge authorization request from the hospital. In no case, the policyholder shall be made to wait to be discharged from the Hospital,” it said.

If there is any delay beyond three hours, the additional amount if any charged by the hospital shall be borne by the insurer from shareholder’s fund, it added.

In the event of the death of the policyholder during the treatment, the insurer shall immediately process the request for claim settlement and get the mortal remains (dead body) released from the hospital immediately.

Approval for cashless facility:

Every insurer shall strive to achieve 100% cashless claim settlement in a time-bound manner, the regulator directed. The insurers shall endeavor to ensure that the instances of claims being settled through reimbursement are at bare minimum and only in exceptional circumstances, it added.

“Insurer shall decide on the request for cashless authorization immediately but not more than one hour of receipt of request. Necessary systems and procedures shall be put in place by the insurer immediately and not later than 31
st July, 2024, IRDAI stressed.

Free look period:

“A period of 30 days (from the date of receipt of the policy document) is available to the policyholder to review the terms and conditions of the policy. If he/she is not satisfied with any of the terms and conditions, he/she has the option to cancel his/her policy. This option is available in case of policies with a term of one year or more,” as per IRDAI.

Cancellation of indemnity based health insurance policy by the policyholder:

The policyholder may cancel his/her policy at any time during the term, by giving 7 days notice in writing. The Insurer shall: a. refund proportionate premium for unexpired policy period, if the term of policy upto one year and there is no claim (s) made during the policy period. b) refund premium for the unexpired policy period, in respect of policies with term more than 1 year and risk coverage for such policy years has not commenced.