I nsurance companies will not be allowed to load charges on an individual medical insurance policy that is being renewed, even if the policyholder has made a claim. This, among other steps like increasing the entry age to 65 and lifetime renewal of health insurance policies, will be part of the Health Insurance Regulation which the Insurance Regulatory and Development Authority (Irda) will soon unveil.
Speaking at a Health Insurance Summit organised by the Confederation of Indian Industry in the Capital, J Hari Narayan, Irda chairman, said loading of a policy, following a claim is unfair, adding the premium charged for any health insurance product offered must be transparent and disclosed upfront. ?Any loading of underwriting charges will have to be done by insurers at the time of designing the policy and not at the time of the claim,? the chairman said.
The exposure draft on Health Insurance Regulation issued by the regulator in May this year had underlined that at the time of filing a health insurance product under the ?file and use?, the insurer will provide complete pricing details along with all the assumption and the premiums will not be allowed to increase for a period of one year once the product is cleared by the regulator.
Insurance companies charge a load or a hike in renewal premium for health insurance if a policyholder makes claims in the previous year. Also, there is no fixed percentage of loading and is done on the basis of claims ratio or claims to sum insured ratio. There are different ways in which loading is calculated and the structure varies from insurer to insurer. The insurer, however, discloses the loading structure in the policy documents as per Irda guidelines.
Loading by insurers is done on the basis of the risk of the insured as assessed by the insurer and the claims made by the insured. Typically, in underwriting-linked loading, which the Irda chairman had underlined, insurers factor in the risk like smoking or any per-existing diseases or any other associated risk.
Bhargav Dasgupta, managing director, ICICI Lombard General Insurance said the removal of loading will indeed be customer friendly. ?We will have to work out the pricing of the product at the time of filing the product keeping in mind all the risk,? he said. At the summit the insurance regulator also said that it will develop 10 standard life insurance products in consultation with insurers which they can launch without seeking regulatory nod under the ?use and file? procedure proposed by the finance minister on Monday.
IPO norms for non-life insurers soon
Irda said it is likely to issue final IPO guidelines for general insurance companies in the next two weeks.
?The insurance advisory committee had a look at the recommendations. So it should be out in the next 2 weeks,” said Irda chairman J Hari Narayan. ?This year we have finalised amalgamation of life (companies) and IPO of non-life.?
New Health Insurance norms
* All health insurance policies will provide for entry age at least up to 65
* Lifetime renewal of health insurance policies if proposal accepted, provided policy is renewed without break
* Insurance firms cannot put any load on the renewal premium even if there is a claim in the previous year
* All health insurance policies will have access for treatment in network provider or in any hospital which is not part of the network provider across India
* Insurer will have to state all terms and conditions with respect to availability and availing of treatment across India in the policy document
* Insurers can offer travel medical insurance policy as a standalone product or an add-on cover to existing health policy by charging suitable premium
