The Insurance Regulatory and Development Authority of India (“IRDAI”) in a Circular dated 16th March 2021 has rolled out the modified guidelines on product filing in health insurance business.
In addition to the norms specified at Clause (C) of Chapter-III of the Consolidated Guidelines on Product Filing in Health Insurance Business dated 22nd July 2020(“Guidelines”), general and health insurers have been instructed to adhere to the following norms while effecting modification of existing products.
• General and health insurers are not allowed to modify the existing benefits, add new benefits in the existing products which leads to imposing an increase in premium. However, it is clarified that insurers are permitted to effect minor modifications as stipulated at Clause (G) of Chapter – III of the Guidelines
• Addition of new benefits / up-gradation of existing benefits may be offered as add-on covers or optional covers with a standalone premium rate to ensure an informed choice to the policyholders.
• Appointed Actuary to review the financial viability of every health insurance product at the end of every financial year in accordance to the provisions of the IRDAI (Health Insurance) Regulations, 2016. The report of such review should be submitted to their Board through PMC along with the analysis of favorable or unfavorable experience of each product as well as recommended corrective action, to ensure sustainability of the product and to protect the interests of policyholders of the underlying product.
• A status report is to be submitted by 30th September of every financial year to the Authority along with the Board’s suggestions and the corrective actions to be taken in the format specified at Annexure A of this circular. The status report for FY 2020-21 should be filed by 30th September, 2021.
• With a view to enable all sections of policyholders to easily understand the contents of policy contract, all insurers are to arrange the policy contracts of all health insurance products in the following order with clear heading so as to draw the attention of policyholders. This format should be adopted in respect of all policies issued from 01 October, 2021 onwards.
The format to be followed is-
1. Policy Schedule
2. Preamble
3. Definitions (to be divided into the following parts with clear demarcation and sub title as under)
o Standard Definitions (Definitions whose wordings are specified by IRDAI)
o Specific Definitions (Definitions other than those mentioned under c(i) above)
4. Benefits covered under the policy
5. Exclusions (to be divided into the following parts with clear demarcation and sub title as under)
o Standard Exclusions (Exclusions for which standard wordings are specified by IRDAI)
o Specific Exclusions (Exclusions other than those mentioned under e(i) above).
6. General Terms and Clauses (to be divided into the following parts with clear demarcation and sub title as under)
o Standard General Terms and Clauses (General terms and clauses whose wordings are specified by IRDAI)
o Specific terms and clauses (terms and clauses other than those mentioned under f(i) above)
7. Other terms and conditions
8. The wordings of all the standard exclusions, standard terms and clauses and standard definitions used in the policy contract should comply with the wordings as specified by the Authority.
The circular clarifies that all products that are already filed with the Authority as per the applicable regulatory framework and are under consideration should be reviewed as per the then prevailing norms.
Source: Insurance Regulatory and Development Authority of India
