Insurers can't refuse health cover renewal, says Irda

The Insurance Regulatory and Development Authority (Irda) today issued guidelines on renewability of health insurance policies applicable to general insurance companies. The guidelines would be applicable from June 1, 2009.

According to the guidelines, a health insurance policy shall be renewable except on grounds such as fraud or misrepresentation and shall not be rejected on arbitrary grounds, especially if the insured made a claim in the previous or earlier years.

Irda also stated that an insurer should not compel any insured covered under a specific health insurance product to shift to another insurance product except in cases where a specific product was being upgraded or discontinued with the approval of the regulatory authority. These apart, a prospectus of the insurance policy should contain detailed upfront disclosures about the terms of its renewal to enable the consumer to take an informed decision and policies should contain a clause that provides for mechanism to condone delays in renewal for up to 15 days.

In cases of group and tailor-made health insurance policies, Irda said the prospectus and policy documents shall contain disclosures about the mechanism for continuity being offered by the insurer to the individual members covered, in the event of the group policy being discontinued or not renewed.

Irda said that revision of premium structure or terms of insurance policies would be accepted only for “justified and compelling reasons or if they are to the benefit of the policyholders”.