Master Circular on Health Insurance Business – Issued by IRDAI
The Insurance Regulatory and Development Authority of India (IRDAI) has issued a Master Circular on Health Insurance Business. This Master Circular shall come into force with immediate effect, except for provisions where specific effective dates are mentioned.
The key information for policyholders, prospects, and customers includes:
Insurance Product Availability: Insurance products are available with add-ons/riders, catering to all ages, existing medical conditions, preexisting diseases, and chronic conditions.
Technological Advancements Treatments: The latest technological advancements and treatments are made available to policyholders.
Customer Information Sheet (CIS): Insurance companies shall issue a CIS as a separate annexure, containing key information on the policy, such as type of insurance, sum insured, exclusions, waiting period, claims procedure, policy servicing, and grievance redressal mechanism
Free Look Period: A 30-day free look period is provided to enable policyholders to review the terms and conditions of the policy and cancel it if not satisfied.
Cancellation of Indemnity Policy: Policyholders can cancel their policy at any time during the term by giving 7 days’ notice in writing.
Nomination: Policyholders can register or change their nomination during the term of the policy.
Grace Period for Payment of Premium: A grace period of 15 days for monthly premiums and 30 days for quarterly, half-yearly, or yearly premiums is available. If the policy is renewed during the grace period, all accrued credits (sum insured, no claim bonus, specific waiting periods, etc.) shall be protected.
Insurance Coverage during Grace Period: Coverage is available during the grace period if premiums are paid in installments.
Renewal of Health Insurance Policy: A health insurance policy shall be renewable unless the product is withdrawn due to established fraud, non-disclosure, or misrepresentation by the insured. The insurer shall not deny renewal based on previous claims.
Migration in case of Indemnity Policies: Policyholders can transfer credits gained to the extent of the sum insured, no claim bonus, specific waiting periods,
Portability in case of Indemnity Policies: The existing insurer shall provide information to the acquiring insurer within 72 hours of receipt of the request. The acquiring insurer shall decide and communicate on the proposal within 5 days.
Policy/Claim cannot be Contested: Policies and claims shall not be contestable on grounds of non-disclosure and/or misrepresentation except for established fraud after the completion of the moratorium period (60 months of continuous coverage).
No Claim Bonus: Accumulated no claim bonus can be claimed by way of addition to the sum assured or discount in renewal premium.
Approval for Cashless Claims:
- Insurers shall strive to achieve 100% cashless claim settlement in a time-bound manner. Authorization for cashless claims should be given immediately, not more than one hour of receipt of request.
- Necessary systems and procedures shall be put in place by the Insurer immediately and not later than 31st July, 2024.
- Insurers may arrange for dedicated Help Desks in physical mode at the hospital to deal and assist with the cashless requests.
- Insurers shall also provide pre-authorization to the policyholder through Digital mode
Final Authorisation for Discharge from the Hospital : Final claim authorisation should be given within THREE hours of receipt of discharge authorisation request received. In no case, the policyholder shall be made to wait to be discharged from the Hospital.
Settlement of Claims: No claim shall be repudiated without the approval of the Claims Review Committee (CRC).
Claims in respect of Multiple Policies: In case the available coverage is less than the admissible claim amount, the primary insurer shall coordinate with other insurers to ensure settlement of the balance amount without causing any hassles to the policyholder.
Implementation of Ombudsman Award: Insurers are required to comply with the award of the Insurance Ombudsman within 30 days. Failure to comply may result in a penalty of Rs. 5000 per day.
The broad requirements to be complied with by insurers in the health insurance business, as outlined in the Master Circular, include:
General Principles:
- Board-approved underwriting policy covering all ages and medical conditions.
- Policy on quality standards and benchmarks for empanelment of hospitals and healthcare providers.
- Ensuring Ayush treatments are at par with other treatments.
- Striving to provide 100% cashless services to policyholders
- Designing proposal forms in simple language and providing them in scheduled languages.
- Disseminating information about products transparently to prospects and policyholders.
- Mandatory forwarding of CIS in the specified format and obtaining acknowledgment from the policyholder
Claims Settlement : A well defined claims handling, claim settlement procedures, turnaround times (TATs) for settlement of claims and policy servicing
No claim should be repudiated without the approval of the Claims Review Committee (CRC) or the Policyholder Management Committee (PMC).
Display on Insurers Website:
- List of hospitals / healthcare providers tie up for Cashless Claim and list of network hospitals
- Procedures to be followed by the policyholder for claim settlement under cashless facility and reimbursement of claims
- Turn Around Time for policy servicing, approvals of cashless as well as reimbursement claim settlement
- List of products on offer and products withdrawn
Training and Technology Solutions:
- Periodical training for intermediaries, distribution channels, and employees on products, TATs, and regulatory changes.
- Implementation of end-to-end technology solutions for effective onboarding, policy servicing, and claim settlement
Performance Monitoring of TPAs:
- Board-approved criteria for monitoring TPA performance, customer servicing, and service level parameters.
- Feedback collection from customers on claims settlement.
- Claw back of remuneration based on customer feedback.
- Payments to TPAs only after satisfactory service discharge
Product Management Committee and Advertisement Committee:
- Establishment of committees for product management and advertisement as per the regulations
Product Filing:
- Insurers must follow a structured procedure for filing new products, riders, add-ons, or modifications, which requires approval from the Product Management Committee (PMC).
- Details of individual and group products should be maintained in designated forms.
Withdrawal of Products:
- Insurers are required to inform the withdrawal of any products, add-ons, or riders within 30 days using the specified form.
- The decision to withdraw a health insurance product/add-on/rider is made by the PMC, with clear documentation of the reasons for withdrawal.
- Existing customers of a withdrawn product should be provided options to renew, migrate to another product, or choose suitable alternatives.
- Distribution channels must be informed well in advance about product withdrawals.
- Refunds for premiums or deposits received for withdrawn products should be promptly issued to policyholders 16.
Miscellaneous Provisions:
- Model product for persons with disabilities, HIV/AIDS, and mental illness
- With specific consent of the policyholder, Insurers may facilitate creation of ABHA number as per procedures laid down..
- Submission of periodic returns on Premium, claims etc. as per the provisions of the master circular on submission of returns issued by the Competent Authority
Source: https://irdai.gov.in/