Gaurang Damani is a happy man these days. Damani,an insurance activist,had filed a public interest litigation,in Bombay High Court,against Insurance Regulatory and Development Authority (Irda) in February,2011 when the third party administrators (TPAs) of the public sector health insurance companies stopped providing cashless facility to individual customers. There are a great deal of inconsistencies and violation in health insurance industry which are not favourable for interests,health and financial well being of more than seven crore Indian consumers, Damani said in his appeal. It also said that because of the fight between hospitals,insurance companies and their TPAs,customers should not get impacted. Bombay High Court,in December 2011,ordered Irda to display draft regulations on health insurance claim settlement on its website as soon as possible,preferably by April 30,2012. Though late by a month,Irda last week issued draft Health Insurance Regulations,2012. According to the experts,the regulation takes care of almost all the issues that health insurance customers have. Below are some of the salient points of the documents. PRICING To address the complaints of arbitrary change in the premium,the regulator says that the discounts and loadings offered shall be objective and disclosed up-front in the prospectus and policy document. For the purpose of providing cover under family floater,the premium levied shall take in to account the impact of the multiple incidence rates for all the family members. The premiums shall not be allowed to increase for a period of one year once the product is cleared by the Authority. In case of revision of premium rates after completion of one year,the insurer shall submit under the File and Use Procedure,the justification for the revised pricing; the recent three years claims experience on the original pricing along with the expected experience and the reasoning; expected claims experience and the rationale/ assumptions for the proposed pricing along with the particulars on how the proposed pricing would meet the adversities experienced,if any. ENTRY/ EXIT AND POLICY DENIAL Till now because of lack of any regulations,many health insurance companies had been discouraging customers above a certain age. The reason is that the risk is skewed towards the insurance pool of people above the age of 55 as they have healthcare needs much more than the younger lot. Irda has proposed that all health insurance policies shall provide for entry age at least up to 65 years. Health insurance policies shall not have an exit age for renewal of the policies,once the proposal is accepted,provided policy is continuously renewed without break. Any proposal for health insurance which is denied on any grounds shall be made in writing with reasons furnished and recorded. Such reasons shall be justifiable,transparent and fair. The insured shall be informed of any loading charged on the premium. CLAIM SETTLEMENT While the insurance companies are in the business of paying claims,in practice many try to find ways to decline a claim. Consumer courts are full of cases where the claim is either denied or delayed by a very long time. To address this anomaly,regulator says on receipt of complete documents,an insurer shall within a period of 30 days offer a settlement of the claim to the insured. If the insurer,for any reasons to be recorded in writing and communicated to the insured,decides to reject a claim under the policy,it shall do so within a period of 30 days from the receipt of complete documents. In case of non-submission of claims documents in stipulated time,insurers shall not repudiate such claims unless and until the reasons of delay are categorically enquired about,reasons recorded and the insurers sufficiently satisfy that the delayed claims could have otherwise been rejected if reported in time. For the purpose of claim settlement,insurer shall make direct payments to the network provider and to the policyholders by integrating their banking system platform with the network provider or the insured,as the case may be. OTHERS There are several other important proposals in the draft regulations which would ensure consumer protection. * Insurers will have to provide a one page information sheet,covering key benefits,exclusions and grievance mechanisms. * The renewal of the health insurance policy sought by the insured shall not be denied arbitrarily. And if denied,shall provide the policyholder with cogent reasons for non-renewal of the health insurance policy. * Insurer must clearly specify the waiting period in pre-existing diseases. * Copy of the agreement between insurer and TPA must be filed with Irda within 15 days. A change in the TPA by the insurer shall be communicated to the policyholders 30 days before giving effect to the change. * All insurers shall have an agreement directly with the hospitals to establish the list of network providers. The insurer shall develop a proper system of empanelment of hospitals or health care providers which summarizes the desired infrastructure for inpatient and day care services with respect to hospitals and other health facilities to be empanelled. Once a hospital or nursing home is empanelled,the insurer shall enter into arrangement with other insurance companies for allowing sharing of network hospitals,transfer of claim and transaction data arising in areas beyond the service area. * All health insurers and TPAs shall establish a separate channel to address health insurance related claims and grievances of senior citizens. The document is prepared after speaking to the industry players. Customers can provide their comments and suggestions on the draft regulations by June 30. We will consider all the suggestions and come out with a comprehensive final guidelines by July 31, J Harinarayan,Chairman,Irda told The Indian Express. According to the insurance experts,if the draft document goes through in its current format,it will provide relief to crores of health insurance customers. ritukant.ojha@expressindia.com
