It is clarified that insurers were permitted to change the base premium after approvals.
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The Insurance Regulatory and Development Authority of India (IRDAI) has come out with a clarification on the way the revision in health insurance premium happens. As per the regulator, there are some reports in the media about hike in health insurance premium rates by general and health insurance companies. Some of the news items attributed the increase in health insurance premiums to certain recent regulatory initiatives taken by IRDAI.
In this regard, IRDAI clarifies that insurers were permitted to change the base premium up to +/- 5 per cent of originally approved premium rates. This is done in order to comply with the guidelines on standardization of exclusions as a onetime measure for seamless transition of existing products to ensure viability and sustainability.
According to IRDAI, as on 30th September 2020, out of 388 products, premiums were increased by general and health insurers up to 5% of the then prevailing rates only in case of 55 products.
Further, the Authority has cleared revision in premium beyond 5%in respect of only 5 health insurance products of general / health insurers during the year up to 30th November 2020 as part of the periodical modification of their respective products, based on the incurred claims experience.
In February 2020, amendments in respect of provisions of Guidelines on Standardization of Exclusions in Health Insurance Contracts and Modification Guidelines on Standardization in Health Insurance were carried out by the IRDAI.