Draft norms on health insurance policies soon: Irda

The Insurance Regulatory and Development Authority (Irda) today said that it will soon come out with draft norms that define terms like critical illness and hospitalisation cost, among others, a move that will reduce the scope for disputes between insurers and hospitals.

"I carry with me the draft regulations (on health insurance policies). It will be out very soon," Irda Chairman J Harinarayan said at a Ficci Health Insurance Conference here.

He said that the Irda would lay down a standard definition for major critical illnesses under health insurance, which would reduce confusion between Third Party Administrators (TPAs), insurers and policyholders.

"...I have written to Union Health Secretary Sujatha Rao, bringing to her notice the work that has been done and suggesting that perhaps the health ministry might like to look at the advisability and prescribe some standard procedure as they think appropriate," he added.

The draft regulation would include standard nomenclature and procedures for critical illness, standard preauthorisation and claim forms, and the standard list for excluded expenses in hospitalisation, Harinarayan said.

An expert committee constituted by industry body Ficci has identified 11 critical illnesses, including cancer, stroke, kidney failure, and major organ and bone transplant, among others.

The claim ratio of the health insurance industry is over 100 per cent, which means that insurance companies are paying more than the premiums they receive.

Harinarayan said that it should be around 70 per cent for the sustainability of the industry.

The health insurance premium for 2007-08 was at Rs 2,757 crore, while the payout was Rs 2,904 crore. Again, for fiscal year FY09, the premium was Rs 3,975 crore and the payout was Rs 4,087 crore.

In FY10, the premium was Rs 7,802 crore and the payout was Rs 7,426 crore.