The Insurance and Regulatory Development Authority is likely to come out with mergers and acquisitions and listing norms for the insurance companies in a few months. We are working on the M&A guidelines and are most likely to finalise them in a couple of months, said IRDA chairman J Hari Narayan at the sidelines of a Ficci health insurance conference.
The chairman also confirmed that IRDA is working on listing norms and these should be out in a couple of months. We would discuss the matter with capital market regulator Securities and Exchange Board of India. The final norms will come out after that, said Narayan.
These guidelines will encourage consolidation in the insurance sector and also lay down rules for companies that wish to go public.
Besides this,the regulator is also working out the numbers to put a ceiling on the charges levied by unit-linked insurance policies. It would be in the best interest of the policyholders to fix a cap on charges in case of Ulips. We are examining the possibility, the chairman said.
Talking about the health sector,the chairman said it needs more products that cater to the needs of senior citizens only. At present,there are six such policies in the market. We are seeing greater interest in this space. Almost 13 new products are already filed with us and should get launched soon, he said.
He also laid emphasis on the need for greater knowledge and awareness in this domain. I do not think that people while buying a health insurance policy want to hide facts about pre-existing diseases,if any. However,it is the dynamics between the agent and insured that just allows them to sign the document without reading it, he noted.
According to industry figures,almost 30 per cent claims are rejected every year by insurers. Of this,almost 90 per cent are on the back of pre-existing diseases. People should be made aware that for smoothless claim process,they should reveal all health-related facts correctly while buying the policy. People with any pre-existing diseases will not be denied cover,but will be levied premium that will be commensurate to the risk involved, said the chairman.
He also highlighted the absence of health products that insure expenses like diagnostic costs and outpatient fee. Of Rs 2,00,000 crore health spend,almost Rs 1,30,000 crore is spent on health-related issues,diagnostics and outpatient fee. Only one-third of the total health spend is on hospitalisation.