From extending lifelong renewability of personal accident covers to discount on renewal premiums and time-bound porting of policies, the IRDAI has proposed amendments to health insurance regulations to benefit policyholders.
According to the draft issued by the Insurance Regulatory Development Authority of India on Feb. 16, an insurer can’t deny lifelong renewal of a personal accident cover on the grounds of policyholder’s age, provided it has been earlier renewed without a break. Previously, such covers were a part of an exclusion list.
Bahroze Kamdin, partner with Deloitte India, said this is a very positive development for policyholders who regularly renewed their personal accident covers only to one day be suddenly denied renewal because of a change in their age bracket. “Accidents don’t have much to do with age and it’s great that the proposed regulation is now taking steps to recognise it.”
Discount On Renewal Premiums
The sector regulator has also proposed to include the word ‘discount’, besides ‘loading’, on renewals of existing health policies to encourage insurers to grant reductions in premiums on renewal in case of improvement in risk profile. Loading is top-up for risk and age on renewal.
Existing provisions only provided for loading on premium on policy renewal that could be removed if risk lowers. Assuming there was no loading for risk on existing policy, discount for lower risk can be provided now with the proposed change, Kamdin said.
Prawal Kalita, managing director, leader-Mercer Marsh Benefits, Marsh India Insurance Brokers Pvt., told BloombergQuint that “over the past two years, the Indian regulator is consistently issuing guidelines in regards to incentivising good health. These guidelines reinforce that by encouraging insurers to offer discounts on the improvement of risk profiles.”
While this is a positive move for cover with care, Kamdin said the “implementation guidelines on discount calculations would be awaited”.