Irda allows portability of health insurance

Policyholders can now switch insurer and carry the benefits of the previous health insurance policy. The Insurance Regulatory and Development Authority (Irda) today allowed portability of health insurance products. It will be applicable for all existing and new contracts from July.

Irda had asked insurance companies to allow policyholders to carry forward the credit gained for pre-existing conditions in terms of waiting period when he or she switches from one insurer to another or from one plan to another, provided the previous policy has been maintained without break.

“Even though policyholders were not happy they could not shift to other insurance company. Now they can carry benefits for pre-existing conditions,” said a senior Irda official.

At present if policyholder wishes to switch from one insurer to other, they do not gain any credit for the period of cover with previous insurer. Health insurance policies have specific exclusions for pre-existing diseases for a specified period of cover during the initial years.

Moreover, if the policy results into discontinuance because of any delay by the insurer in accepting the proposal, Irda said the insurer should not treat the policy as discontinuance and allow portability.

The regulator had asked all insurance companies to share the database, including the claim details of the policies, where the policyholders had opted for portability with their counterparts, if requested by the counterpart within seven working days of such request. The regulator asked insurers to acknowledge applications within three working days.

Non-life insurance industry is working on a portable health insurance product where the cover size is limited to Rs 1 lakh. Policyholder of up to 65 years can migrate under this common portable health insurance product from one insurer to another mediclaim policy provides.

Last year, industry collected Rs 8,000 crore from health insurance, including both group and retail portfolio. This is around 25 per cent of the premium collected by all non-life insurers in 2009-10. Of this, retail health was around Rs 3,500 crore. Insurance experts anticipate the health insurance to grow by 30-35 per cent during this financial year.