How consumers have benefitted from Irda's direction to insurance companies

There is good news for policyholders, as the Insurance Regulatory and Development Authority of India (IRDAI) has directed all insurers not to modify the coverage of existing health policies which can lead to an increase in premium. For bringing transparency and clarity the insurance regulator has also said that any addition or up-gradation of existing benefits may be offered as optional covers with a standalone premium rate. The move aims to ensure an informed choice for the policyholders.

Additionally, the regulator has also shared guidelines on the standard format of the policy contract, which will be effective from October 1, 2021. The standard format of policy contracts across all insurers will lead to further simplification and a better understanding of the policy for customers.

Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance, said, “The move will help the customer make an informed choice and provides them with an opportunity to enhance the coverage by opting for add-on covers as per their needs.”

IRDAI has been working towards simplifying insurance and bringing transparency in order to encourage more people to opt for insurance. The recently modified guidelines on product filing in the health insurance business are a step in that direction. Here is a low-down on some of the steps that the regulator has taken over the last year to make health insurance policies simpler amid the COVID-19 pandemic.

Standardisation

In one of the biggest moves, IRDAI last year brought in standardisation in the terms and conditions, waiting periods and exclusions across health insurance policies. With the standardisation of exclusions, there is more transparency between insurers and customers. The move has also made it easier for a user to compare policies along with smooth portability.

Widening of Coverage
Apart from common terms and conditions, the regulator has also widened the coverage including HIV, Alzheimer’s, mental illnesses, genetic diseases, among other things. Most importantly in tandem with recent times, consultations over the telephone will also be covered.

Moratorium Clause
The moratorium clause has been introduced across all policies under which after the completion of 8 years the health insurance policies are not contestable except in case of any fraudulent claim.

Arogya Sanjeevani Policy
Another big step towards making health insurance simpler and easier was the launch of Arogya Sanjeevani Policy in April 2020. The policy is suitable for beginners or for people looking for base-level coverage as it is easy to understand with common features and exclusions across insurers.

Corona-specific policies
To offer people a simple affordable health plan, the regulator asked insurers to launch standard short-term Coronavirus-specific policies. These policies were designed keeping in mind the changed healthcare scenario where it covers the cost of PPE and home isolation.

Wellness Guidelines

Wellness and preventive healthcare have become important like never before especially during the ongoing pandemic. To fill the gap the regulator recently released guidelines to mainstream the concept of wellness with a focus on preventive than traditional curative aspects. Under this, insurers have been asked to offer coverage for health check-ups, diagnostic tests, outpatient consultations, among other things.

E-policies

One of the challenges for insurers during the pandemic was to issue a physical policy document. Realising the need, IRDAI allowed insurers to take consent through a one-time password. The move has streamlined the entire process as you don’t require a wet signature on the proposal form.

Over the last year with the slew of reforms, the regulator has made insurance policy much simpler and customer-friendly.