Mumbai | March 17, 2021 4:48:41 am
With insurance companies arbitrarily jacking up premiums by up to 100 per cent on health insurance policies, insurance regulator Irdai has stepped in and asked insurers to desist from unilaterally hiking premiums after making small changes in the policy, in the wake of a rise in new premium income and claims. The move comes at a time when insurers were planning another round of hike in premium on health policies.
The Insurance Regulatory and Development Authority of India (Irdai) has asked insurers to review the viability of every product at the end of the fiscal year and submit a report to it. “General and health insurers are not allowed to modify the existing benefits, add new benefits in the existing products which leads to imposing an increase in premium,” Irdai said in a notification to insurers.
However, it is clarified that insurers are permitted to effect minor modifications, it added.
“Addition of new benefits or upgradation of existing benefits may be offered as add-on covers or optional covers with a standalone premium rate to ensure an informed choice to the policyholders,” the regulator said.
Appointed Actuary should review the financial viability of every health insurance product at the end of every financial year in accordance with provisions of Regulation 6 of Irdai (Health Insurance) Regulations, 2016, it said.
According to the Irdai, the report of such review should be submitted to its Board through PMC along with the analysis of favorable or unfavorable experience of each product as well as recommended corrective action, to ensure sustainability of the product and to protect interests of policyholders of the underlying product. “A status report should be submitted by September 30 of every financial year to the Authority along with the board’s suggestions and the corrective actions to be taken in the format specified,” it said.
“The Irdai move will check the arbitrary rise in health insurance premiums. Health policies have become popular of late due to the Covid pandemic. However, some insurers are trying to make extra money by unilaterally increasing the premium,” said a source.
According to official sources, insurers give big discounts to corporates and institutions in group health insurance covers and pass on the burden to individual policyholders. “Retail holders have been subsidising the group covers. Some companies made minor changes in the policy and hiked the premium,” they said.
Rising claims and widening of illnesses under health policies have also pushed up premiums by up to 100 per cent, raising concern among senior citizens, said an official of an insurance firm.
Health insurance premium collection has risen 14.59 per cent to Rs 48,501 crore as of January. However, overall industry premium marginally increased by 2.98 per cent to Rs 1,64,274 crore. With Covid cases mounting, insurers saw a surge in demand for health policies with premium collection rising across the board.
Policy holders above the age of 65 witnessed a major hike in the last a few months. “The hike is more pronounced in case of senior citizens who are most vulnerable,” said Pawan Dharnidharka, a stock market professional.
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