Irda issues norms to bring clarity in health insurance

In a bid to remove confusion and bring better clarity on various terms used in health insurance, the Insurance Regulatory and Development Authority (Irda) has issued guidelines for standardisation of these. In an elaborate circular addressed to life insurers, non-life insurers, stand-alone health insurances and third party administrators (TPAs), Irda has defined 46 commonly used terms and standardised 11 critical illness terms.

“Standard terms would reduce ambiguity, enable all stakeholders to provide better services and enable customers to interact more effectively with insurers, TPAs and providers. All insurers shall adhere to the stipulated definitions, while defining these 46 core terms in all health insurance policies,” said the Irda circular.

To resolve the differences in the definitions of critical illnesses adopted by various insurers, 11 critical illness terms have also been standardised. From now on, all products offering the 11 critical illness coverage shall ensure that they are in line with the stipulated definitions.

Irda has called for standard pre-authorisation and claim form to streamline processes at all stages. This will enhance the ability of providers to obtain timely prior authorisation.

The regulator has also brought out a standard list of 199 excluded items in hospitalisation indemnity policies. “However, insurers may include these exclusions, if the product design allows for, or if the insurer wants to include these as part of hospitalisation expenses,” said the circular.

In order to capture relevant product design information, Irda has asked insurers to use a standard file and use (F&U) application form along with the database sheet and customer information sheet.

The guidelines will be effective from July 1, 2013 for group products and October 1, 2013 for other products.