Lok Sabha Question No. 4079 (UNSTARRED), answered on 2016-12-09
Subject: Health Insurance Regulations
Ministry: FINANCE
Asked by: BHEEMRAO BASWANTHRAO PATIL, RANGASWAMY DHRUVANARAYANA

## GOVERNMENT OF INDIA

## MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO. 4079

TO BE ANSWERED ON 9 th  December, 2016/Agrahayana 18, 1938 (Saka)

## Health Insurance Regulations

## 4079. SHRI BHEEMRAO B. PATIL: SHRI R. DHRUVA NARAYANA:

Will the Minister of FINANCE be pleased to state:

- (a) whether  the  Insurance  Regulatory  and  Development  Authority  of  India  (IRDAI) introduced  several  regulatory  changes  to  health  insurance  and  if  so,  the  details thereof;
- (b) the  aim  and  rationale  behind  such  regulations  and  whether  such  regulations  have balanced customer protection and the commercial interest of the insurer;
- (c) if so, the details thereof; and
- (d) whether such regulations have increased transparency and flexibility in withdrawal and rolling out of products and if so, the details thereof?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SANTOSH KUMAR GANGWAR)

(a)  to  (d):  Yes,  Madam.  Insurance  Regulatory  and  Development Authority of India (IRDAI) has  reviewed  IRDA  (Health  Insurance)  Regulations,  2013  and  notified  IRDAI  (Health Insurance) Regulations, 2016 on 18 th  July 2016. A gist of the changes made is annexed. The Authority  prescribed  constitution  of  a  Product  Management  Committee  (PMC)  for  General and  Health  Insurers,  which  is  an  internal  oversight  mechanism  within  the  company.  PMC shall approve roll-out of Group Insurance products under Use and File procedure and also withdrawal  of  products.  Prior  approval  of  IRDAI  is  dispensed  for  Group  Health  Insurance Products  and  for  withdrawal  of  the  products  of  General  and  Health  Insurers.  The  revised regulations increase the transparency and flexibility in withdrawal and rolling out of products.

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Annexure  referred  to  in  reply  to  Lok  Sabha  Un-Starred  Question  Number  4079  for 09.12.2016

## Key Changes of IRDAI (Health Insurance) Regulations, 2016

-  Under  Health  plus  Life  Combi  Product,  Combination  of  any  Life  Insurance  cover offered by a life insurer and a Health Insurance cover offered by General Insurer or Health Insurer is allowed.
-  General Insurers or Health Insurers are permitted to launch pilot products for a period not exceeding five years.  At the end of the five-year period from the date of launch of the  product,  product  shall  be  continued  either  as  a  regular  product  or  shall  be withdrawn.
-  Life Insurers may offer long term Individual Health insurance products i.e., for term of 5 years or more. Life insurer may not offer indemnity based products.
-  Credit  Linked  Group  Health/Personal  Accident  policies  can  be  offered  for  a  term extended up-to the loan period not exceeding five years by all Insurers.
-  Any Health  Insurance  Product  offered  by  Insurers  shall  not  be  marketed  or  offered unless it is filed with the Authority as per the Product Filing Guidelines. Product Filing Guidelines specified Use and File norms for Group Health Insurance Products offered by General and Health Insurers.
-  Product Management Committee (PMC) of General and Health Insurers can decide on withdrawal of Health Product by complying with the extant Guidelines prescribed in Product Filing Guidelines, 2016.
-  Review  of  product  performance  after  five  years  to  seek  fresh  approval  stands deleted.
-  Norms specified for Group Insurance.
-  General  and  Health  Insurers  may  devise  mechanisms  or  incentives  to  reward policyholders  for  wellness  and  preventive  habits.  It  is  further  specified  that  the underwriting  policy  shall  also  cover  the  approach  and  aspects  relating  to  offering health insurance coverage not only to standard lives but also to sub-standard lives. Denial of proposal shall be in writing and shall be the last resort.
-  Insurers are now permitted to use the same proposal form without any change, for any number of their products. Norms are incorporated to protect the privacy of the policyholders.
-  Restriction on allowing Cumulative Bonus to benefit based products stands deleted.
-  General  and  Health  Insurers  to  endeavour  to  provide  coverage  for  one  or  more systems under AYUSH. Earlier exemption to Benefit based products stands deleted.
-  Norms  on  Wellness  &  Preventive  Aspects  of  health  insurance  products  are specified.
-  The  nomenclature  of 'Standard  List  of  Excluded  Expenses  in  Hospitalization Indemnity policies' stands changed to 'Items for which optional cover may be offered by Insurers' in order to enable the Insurers cover these generally excluded items at their discretion.
-  Policyholder shall have the right to require a settlement of his/her claim in terms of any of his/her policies.
-  No fresh underwriting at renewal stage where there is no change in Sum Insured offered.  Where  there  is  an  improvement  in  the  risk  profile,  the  Insurer  may endeavour to recognise that for removal of loadings at the point of renewal.
-  Earlier Regulatory provision of HIR, 2013 [Reg. No. 8(d)(iv)] on claim event falling during two policy periods stands deleted. No claim shall be closed in the books of the Insurer without proper disposal as per policy terms and conditions.
-  The following other disclosures are to be made:
-  Product-wise or location or geography-wise particulars of the TPAs
-  Product-wise cashless services offered
-  Geography-wise list of Network Providers
-  Specific disclosures in case of Pilot Products
-  The Insurer may provide a permanent Identity card (Smart Cards) to avail cashless facility which is valid as long as the policy is renewed with the company.
-  Authority specified certain Standards and benchmarks for hospitals in the provider network through Guidelines.
-  Where a claim is denied or repudiated, the communication shall be made only by the Insurer. Reasons  for the denial or repudiation to be specified referring to corresponding policy conditions. Details of grievance redressal procedures available with the Company and with the Insurance Ombudsman to be furnished
-  Insurers and TPAs should put in place systems and procedures to identify, monitor and mitigate frauds.

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