All personal accident policies will be renewed lifelong, insurers will have to obtain the entire claim history for portability and are encouraged to give discounts on renewals if there is an improvement in the policyholder’s risk profile. These are part of the proposed comprehensive review of the health insurance regulation by the insurance regulator to protect the interest of policyholders .
The proposed Insurance Regulatory and Development Authority of India (Health Insurance) (Amendment) Regulations, 2022, underlines that for individual products, the loadings on renewal will be offered for the entire portfolio and will not be based on any individual policy claim experience. Insurers cannot resort to fresh underwriting by calling for medical examination or fresh proposal form at renewal stage where there is no change in sum insured offered.
Irdai has stressed that insurers may devise mechanisms or incentives to reward policyholders for early entry, continued renewals, favourable claims experience, preventive and wellness habits and disclose upfront such mechanisms in the prospectus and the policy document. The cost of any pre-insurance medical examination will be decided by the insurer who will be responsible for ensuring availability of cashless facilities at network providers.
Portability of policy
The regulator has said that in case a policyholder wants to port his policy, it will be the responsibility of the insurer to obtain the entire claim history of prior policy years from the existing insurer and no claim will be repudiated on the grounds of non-disclosure of any of the claims already made with the existing insurer. On receipt of intimation for portability, the insurance company will furnish the applicant the portability form together with a proposal form and relevant product literature on various health insurance products which could be offered.
“Within five working days of receipt of the portability form, the insurance company shall seek the necessary details of medical history and claim history of the concerned policyholder from the existing insurance company. This shall be done through the web portal being maintained by IIB,” the draft amendments note.
Karn Thakuria, lead, Parterships & Alliances, Riskcovry, an insurtech company, says the regulator’s proposed amendments will result in transparent sharing of claims data between insurers which, in the medium / long term, will help all insurers underwrite and price health insurance more effectively. At present, a customer who wants to port his health insurance has to apply to the insurer at least 45 days before the premium renewal date of the existing policy. The insurer will not be liable to offer portability if the policyholder fails to do so in the prescribed time.
Personal accident policies
In personal accident products, once a proposal is accepted and issued and renewed periodically without any break, insurance companies cannot deny renewal of the policy on grounds of the age of the insured and it will be under the ambit of lifelong renewability in the interest of the policyholders.
A personal accident insurance pays the sum insured in case of death or total permanent disability of the policyholder. In case of a temporary disability of the policyholder, the insurer pays a certain percentage of the sum insured, which varies as per the disability suffered. Apart from comprehensive personal accident policies, all general and standalone health insurance companies have launched a standard health insurance policy known as Arogya Sanjeevani last year after the insurance regulators’ regulations.