The government has given a big relief to the policyholders who take health insurance policy. The Insurance Regulatory and Development Authority of India (IRDAI) has instructed health insurance providers not to make any changes to their existing health insurance policies, which would increase the premiums of policyholders. This directive from IRDAI will be applicable to health insurance as well as personal accident insurance and travel insurance.
In a circular, the Insurance Regulatory and Development Authority of India (IRDAI) said that general and standalone health insurers are not allowed to add such benefits to the existing policy or modify the policy, which leads to an increase in premium. The regulator also said that insurance companies are allowed to make minor amendments as per the ‘Consolidated Guidelines on the product offering in the health insurance business’ issued in July last year.
Policyholders will have to be given a thorough knowledge
The circular issued this week stated that in addition to the existing benefits, any new benefits can be given as additional cover or alternative cover and policy holders should be given information about this and give them the option.
Apart from this, the regulator has also asked to appoint actuary (risk calculator) to review the financial viability of all health insurance products at the end of each financial year. This review report will be submitted to the board of the insurance company. The report of such review shall be submitted to the board of the insurer along with an analysis of the favorable or unfavorable experience of each product.
The status report, along with the board’s suggestions and corrective actions, will have to be submitted to the authority by 30 September of each financial year.
Keep the language of the policy document handy
IRDAI has also asked the insurers to use easy words to document the policy so that the policy holders can understand it easily. From 1 October this year, all insurers have been instructed to adopt the standard format of policy contracts with clear headings so as to attract the attention of policyholders.
According to the instructions of the Regulatory, the contract should contain details of the policy schedule, the preamble, the definition, the benefits received under the policy, the exclusions, the general terms and more.
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