Don't modify existing health insurance policies that leads to higher premium: IRDAI tells insurers

New Delhi: Irdai has directed health insurance providers not to make any changes to existing health policies that may lead to a rise in premium for policyholders. The directions are also applicable for personal accident and travel insurance cover. In a circular, the Insurance Regulatory and Development Authority of India (IRDAI) said general and standalone health insurers are not allowed to modify existing benefits and add new benefits in the existing products, which leads to imposing an increase in premium. The watchdog also said that insurers are permitted to effect minor modifications in accordance with “Consolidated Guidelines on Product filing in Health Insurance Business” issued in July last year. “Addition of new benefits/ up-gradation of existing benefits may be offered as add-on covers or optional covers with a standalone premium rate to ensure an informed choice to the policyholders,” IRDAI said in the circular this week. Further, the regulator has asked appointed actuaries to review the financial viability of every health insurance product at the end of a financial year. The report of such a review should be submitted to the insurer’s board along with an analysis of favourable or unfavourable experience of each product as well as recommended corrective action in order to ensure the sustainability of the product as well as to protect the interests of policyholders of the underlying product, the circular said. The status report needs to be submitted by 30 September of every financial year to the authority along with the board’s suggestions and corrective actions to be taken. The status report for 2020-21 should be filed by 30 September, 2021, as per the regulator. IRDAI has also directed the insurers to ensure that policy wordings are simple so that policyholders can understand them easily. From 1 October this year, all insurers have also been directed to follow a standard format for policy contracts in a clear heading so as to draw the attention of policyholders. The contract should contain details on the policy schedule, preamble, definitions, benefits covered under the policy, exclusions, general terms and clauses, among others.