The central insurance watchdog of India, the Insurance Regulatory and Development Authority of India (IRDAI), recently stepped up its efforts to bring more people under health insurance. With the goal of “insurance for all” by 2047, the IRDAI’s latest norms hint at a more customer-centric approach, adding more clarity and inclusivity to the mix.
From the start of the financial year in April 2024, IRDAI made some very crucial changes in rules governing health insurance, including the slashing of cancellation fees on certain plans. These changes came via various notifications from the regulator.
While the rules came into effect earlier this year, the regulator gave insurance firms a transition time till the end of September to fully comply with the new rules that were released in March and May this year. This also included existing policies in force. So, if you are a health insurance policyholder, it would be beneficial to note the latest update to the rules.
1. Health insurance gets a no-claim bonus!
If you drive an automobile, you would be familiar with the concept of a no-claim bonus in vehicle insurance. According to the new changes to the rules, there are two ways in which the insurance companies can provide you with a bonus, as long as you haven’t filed any claims for the year.
They can offer the customer a choice for either a discounted premium for the upcoming year or an increase in the overall sum insured without changing the premium.
2. Cancelling a health insurance policy gives you a better refund
If you are not happy with the current health insurance policy and want to cancel it, it is now easier than ever. Yes, this applies even if you have made a claim. According to the new regulations, if a customer provides the insurance company with a written notice of seven days, you will get a refund in accordance with the time remaining in the policy. For instance, if you paid Rs 50,000 for a policy and decided to cancel it after six months have passed, you will get half of it—Rs 25,000—as a refund, provided you haven’t made any claims. IRDAI has also slashed the cancellation fees.
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3. Higher scrutiny on claims but less paperwork for the customer
The IRDAI has instructed the insurance companies to collect the relevant documents for each claim from the hospitals. On top of that, each claim will now go through a “claims review committee” by the insurance company for approval. If the claim is denied either fully or partially, the committee needs to give proper reasons and point to the exact documentation.
4. No more 'missing' important policy details and information
All insurers need to display prominent information regarding health insurance. For instance, they need to display which hospitals and healthcare providers can provide cashless claim settlements, which ones are included in the network, and a clear set of details needed from the customer for reimbursement if claimed in hospitals outside the network, along with steps to follow for cashless claim settlements and reimbursements. They also need to provide clear information on the time period needed to service the claims and process the reimbursements.
5. Insurers will be slapped with fines if they go against the ombudsman
The IRDAI increased the fines on insurance companies if they delay following an order from the ombudsman. If the insurer does not follow the order within 30 days, they also need to pay a penal interest in accordance with the ‘Protection of policyholders’ regulations published in the Gazette.
Most insurance companies have already updated their websites, as these rules have come into full effect since October began.