Latest IRDA Health Insurance Regulations 2016–17

By | August 12, 2017

The Insurance Regulatory and Development Authority of India announced Health Insurance Regulations 2016 on 12th July 2016. Few positives were insured to the individuals to look for. Below is the brief description of these changes:

  1. Life Insurance Companies cannot Sell Mediclaim Policies

There are two types of health policies in the insurance market. They are Indemnity plans and other is Defined Benefit Plans. Indemnity Plan ensures indemnity against hospitalization expenses up to the pre defined limit. In the case of Defined Benefit Plans, the entire benefit defined will be paid in full. But this happens only in predefined disease.

Under the Health Insurance Regulations 2016, life insurance companies will not be able to issue any medical insurance.

        2. Pilot Products

 IRDA’s Health Insurance Regulations allowed health insurance companies to offer pilot products. It is a move to offer innovative products and features. This will be offered to the insurer for a maximum of five years. After this duration, the product will turn to an ordinary health insurance product. The power has also been decentralized. If the pilot product is unfeasible to maintain by the health insurance companies, it can be stopped. This move will bring more innovation and attraction to the health insurance product. 

  1. Discounts for early buyers and health conscious customers

It is always considered a good habit to have a mediclaim. After the Health Insurance Regulation 2016, if somebody buys a health insurance or mediclaim at an early age they will have benefits. People who will buy at an early age, renew regularly or wellness habits or practice preventive, then discounts will be given. 

  1. Credit or Loan Linked Health Insurance

Life insurance companies also provide term insurance based on the concurrent loan or credit. If it happens that the policyholder dies, then the nominees can pay back the loan dues using claim amount. Health insurance companies will now, therefore, offer credit linked group health insurance products. 

  1. No commission to agents if opted for portability

With the effect of the new regulations, if someone is opting for portability then that person will have benefits. If people are opting for portability then agents will not get any sort of commission. Portability of health insurance is nothing but just like mobile number portability (MNP). However, there are some rules and regulations for this. Portability options allow the insurer to provide good facilities and render better services.

But if there is no commission to the agents due to portability then they may sell new products. They would not force people to use portability option rather will sell new products. Hence if someone desires to go with portability option they must stick to it.

  1. Data Disclosure to Improve Transparency

The new regulation in the health insurance sector has been a well-aimed effort to remove the mediators. There has been a try by omitting the commissions of the agent. There has been also attempting to eradicate and tackle corruption. The new regulation has made data disclosure important. This will, in turn, make things more transparent.

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