IRDA REGULATIONS | HEALTH INSURANCE

 IRDA REGULATIONS

The Government of India in April 1993, appointed the committee of Reforms in Insurance sector with Shri. R. N. Malhotra, who was a former Governor of RBI. As per the committee reocmmendations, the government set up a regulatory body known as ‘Insurance Regulatory Development Authority (IRDA). IRDA was formed by an Act of Indian Parliament known as IRDA Act 1999.

The main aim of IRDA is ‘to protect the interest of the policy holders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto’.

IRDA Health Insurance Regulations 2016

Pilot Products: IRDA’s new regulations governing health insurance now allow health insurance companies to offer pilot product. The products will be offered to policy holders for a maximum period of 5 years, after the expiry of the period, the products will go back to functioning as regular health insurance product.

Data disclosure: In addition to repeated claims, which include claims that couldn’t be paid back due to incomplete documentation / failure on the policy holder’s part to follow up with the insurer. This helps to improve transparency.

Discounts: In order to motivate and increase awareness regarding the importance of health insurance, people who purchase health insurance early in life and have regular renewals will get the benefit of discounts in premium and / or on medical services like diagnostics, consultations etc.

Credit linked health insurance: The benefit provided by these plans is dependent on the condition that upon the death of the inusred, their nominee can utilize the claim amount of the policy to pay back the loan. As per the new regulation, the insurance companies offering credit linked group health insurance products for maximum of five years.

Portability: As per the new regulations, insurance agents will not get any commission if customers choose health insurance portability. They will continue to get commission when a policy holder renews the same insurance policy regularly.

Combi plan: the new regulations allow the health insurance companies to offer combi plans which can be a hybrid of any health and life (like endowment, money-back, ULIP) plan.