IRDAI’s New Rules/Standardisation Guidelines for Health Insurance

IRDAI is an acronym of the Insurance Regulatory and Development Authority of India. The IRDA meaning is explained in this section. The sole purpose of constituting IRDAI was to optimise the existing insurance industry in India and to provide new avenues for development. The formation of IRDAI was suggested in 1999 as an autonomous body. However, in April 2000, it became a statutory body for the regulation of the Indian insurance sector. In this article we will take a look at the latest IRDAI Guidelines.

IRDAI is an acronym of the Insurance Regulatory and Development Authority of India....

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IRDAI’s New Rules/Standardization Guidelines for Health Insurance

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Benefits For Health Insurance Policyholders
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What are IRDAI’s New Standardisation Guidelines?

A person’s health becomes a matter of concern when a medical emergency hits. It can be equally drowning for the patient and the loved ones both in terms of sufficient financial aid and emotional support. The financial support can be provided by a health insurance company if the patient is covered with a comprehensive policy. A potential policyholder has complete freedom over choosing a policy as buying health insurance is not a legal requirement. But how can the policyholder trust an insurance company? This is where IRDAI’s New Standardisation Guidelines come into the picture.

The trends in the insurance industry change at a rapid pace. Be it the introduction of digital insurers with the advent of the internet, or the globalisation of technological advancements with respect to insurance products. IRDAI needs to keep up to date and this is done periodically with the help of standardisation guidelines. The latest edition was IRDAI new guidelines of 2020.

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IRDAI Rules for Health Insurance

The IRDAI has meticulously jotted down multiple rules that need to be complied with. These rules help both the insurer and the insured to provide and avail a fair deal in terms of health insurance and allied services. Following is a list of some important rules laid down by the IRDAI, if interested you can visit here to read more health insurance rules.

If the policyholder renews a health insurance policy in time (without any gaps in renewal), then the policy may not have an exit age.

The validity of a Group Health insurance policy can only be of one year.

It is an obligation of the insurance company to inform the policyholder about the terms and conditions of a health insurance policy with respect to availing treatment at medical facilities across India.

For specific health insurance policies that provide coverage to a particular group of people (for example children up to a certain age, students, pregnant women, etc.) the insurance company shall provide an option to the policyholder for migrating to another plan upon meeting the exit criteria. And provide suitable credits if the policy was renewed without any gaps.

If an application for buying a health insurance policy is denied, the insurance company should provide a fair, justifiable, and transparent reason in writing to the applicant.

The policyholder that renews the policy in time, has bought the policy early in life or provides a favourable claims experience with an insurance company shall be rewarded. The rewards (as approved by the board) should be clearly mentioned on the prospectus and policy document.

The insurance company should provide a list of medical facilities (government or others) to the policyholder from where the medical reports will be accepted by the company before issuing the policy.

The amount of premium charged, especially for senior citizens, should be justified, fair, and transparent. The final amount should also be communicated in a clear manner to the potential policyholder.

IRDAI’s New Rules: Standardisation Guidelines for Health Insurance Policy

The latest IRDA guidelines for health insurance focus on aspects related to claim settlement, use of multiple policies, etc. Take a look at the following new IRDAI rules:

Claim Rejection: A health insurance company cannot reject a claim if the policy is renewed without a break for 8 years by the policyholder. The 8-year period will be called the moratorium period. The insurance company cannot appeal to the IRDAI against the settlement of such a claim except for fraud and/or a claim raised against the exclusion of the policy after the moratorium period.The insurance company cannot reject a claim on the basis of misrepresentation or non-disclosure. IRDAI has given a period of 8 years to the insurance company for verifying the information provided by the policyholder and thus, a claim cannot be rejected on those grounds.
Inclusion Of Telemedicine Under Health Insurance: The COVID-19 pandemic has forced both healthcare providers and patients to provide and avail remote consultations. The fee for such online consultations can amount to a large sum that would prove to be a financial loss to the insured person. Thus, IRDAI has decided to ask health insurance companies to include telemedicine in the coverage where applicable. This move has allowed medical practitioners and patients to freely avail medical opinions.
Claim Settlement: In case of a delay in claim settlement from the insurer’s end, the insurance company is liable to pay the interest on the claim amount at the rate of 2% more than the bank rate. The claim should be settled within 30 to 45 days from the date of communicating the last required document to the policyholder. The time duration will be dependent upon the nature of the claim and investigation required.
No upper age limit: As per IRDAI health insurance age limit has been removed. Insurers are no longer required to have an age limit for health insurance plans, so they must offer policies to people of all ages. This is particularly helpful for senior citizens who can buy a comprehensive policy whenever they want.
Cashless approvals: Insurance companies must approve final cashless authorizations within three hours of receiving bills at discharge. They must also decide on cashless requests within one hour of receiving them, and implement systems and procedures by July 31, 2024. Insurers can also set up dedicated help desks at hospitals to assist with cashless requests.
Policy terms and conditions: Insurers can revise terms and conditions for products that are warranted by updated provisions in the 2024 IRDAI (Insurance Products) Regulations. They can do this under the existing UIN with approval from the Product Management Committee (PMC). The PMC must ensure that policyholder benefits, such as waiting periods and moratorium periods, are protected and carried forward to new policies. Insurers can also extend benefits to existing policyholders based on the revised regulatory framework.
Reduction of waiting period for PED to 3 years: The maximum waiting period for covering pre-existing diseases under health insurance has been reduced by IRDAI from 4 to 3 years. In other words, the expenses for treating such pre-existing illnesses as diabetes or hypertension can be claimed by the insured person if the waiting period does not exceed 3 years. Further, the insurance companies cannot turn down any claim related to pre-existing illnesses at the end of this compulsion of 3 years.

The above guidelines will be applicable to health insurance products filed from April 1, 2024. As far as existing products are concerned, the terms and conditions will be modified to comply with the rules upon renewal after April 01, 2024, and onwards.

Benefits For Health Insurance Policyholders

IRDAI new guidelines for health insurance are not limited to the insurance company, they also apply to the policyholder. The following rules are to be followed by a policyholder for the corresponding situations.

Multiple Policies

A person could have bought multiple policies of the same type. In case of a claim, the insured can choose to raise a claim at a preferred insurance company and the insurer will be liable to settle the claim as per the terms and conditions of the policy. The insured can choose to raise a claim for an amount that has been disapproved by one insurer, by raising a claim for the balance amount with another insurer in case of multiple policies. This stands true in case the sum insured gets exhausted under one policy.

Health Insurance Portability

A health insurance policyholder can choose to migrate to a new plan of a similar nature in case he/she is not satisfied with the services provided by the insurance company. There can be two situations when it comes to health insurance portability. First, migrating to another plan offered by the current insurance company or migrating to a new plan with another insurance company.

What Are The Functions Of IRDAI?

The constitution of India has given authority to the IRDAI for looking into the regulation and development of the Indian insurance industry. As per the law, the following are the main functions of IRDAI:

The authority to register, renew, update, suspend, withdraw, or cancel the registration of an insurance company.

Reviewing, authorising, or rejecting insurance products.

Working in the interest of a policyholder as well as the insurance company for fair practices at all stages of providing insurance to a policyholder.

Ensuring the regulation and development of businesses allied to the insurance industry.

The Tariff Advisory Committee is supposed to be supervised by the IRDAI.

Looking into the regulation of investment of funds by an insurance company.

Addressing and solving the disputes between various entities related to insurance.

Conducting audits of insurance companies.

Benefits of Online Health Insurance Policy

Buying a health insurance policy online can be beneficial in multiple ways. First, buying health insurance policy online allows you to review the coverage and compare plans from various insurance companies. If you are buying a policy from a digital insurance company, you will notice that it is cheaper as compared to its offline counterpart. Lastly, one can access the insurance company’s website anytime, from anywhere with the help of an internet-enabled device.

Frequently Asked Questions

Written by Roocha Kanande

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Reviewed by Rupinderjit Singh

I find the world of policies and premiums absolutely fascinating! Join me as I unravel health insurance with a dash of creativity and a fresh perspective.