The insurance coverage regulator has asked the insurers not to modify the current policies, that leads to boost in premiums.
After the The Spuzz Online published a story on February 24, 2021, drawing consideration of the Insurance Regulatory Authority of India (IRDAI) towards the complaints received from the holders of well being insurance coverage policies that insurance coverage organizations have elevated the renewal premium on the pretext of standardisation, the insurance coverage regulator has asked the insurers not to modify the current policies, that leads to boost in premiums.
In a circular dated March 16, 2021, addressing CEOs of all General and Standalone Health Insurance Companies, IRDAI informed that it has added some further norms in addition to the norms specified at Clause (C) of Chapter-III of the recommendations that common and well being insurers must adhere to even though effecting modification of current solutions.
According to some of the new norms –
General and well being insurers are not permitted to modify the current rewards, add new rewards in the current solutions, which leads to imposing an boost in premium. However, it is clarified that insurers are permitted to impact minor modifications as stipulated at Clause (G) of Chapter – III of consolidated guideline on item filing in well being insurance coverage small business.
Addition of new rewards / up-gradation of current rewards might be presented as add-on covers or optional covers with standalone premium price to make certain an informed option to the policyholders.
To simplify policy wordings, the IRDAI has asked the insurers to arrange the contents of policy contracts in a specified manner with clear heading, which is to be adopted in respect of all policies issued from October 1, 2021. The insurance coverage regulator has also specified that customising the policy contracts of the current solutions to comply with the new format will not be regarded as modification.
In its story, the The Spuzz Online had reported that – following standardisation of the well being insurance coverage policies, policyholders are having renewal notices with larger premium even as there are no alterations in the age slab of policyholders or in the sum insured.
Why standardisation of well being insurance coverage policies leads to boost in premium?
Attracting the notice of the IRDAI, the story described that – along with standardisation of functions of the policies – there is a need to have for standardisation of premium as effectively.
While the IRDAI has barred the insurers from hiking the premium of current policies by modifying their functions, it is time to see if the insurers roll back the hike and refund the excess premium currently collected from the current policyholders or not.