The Hindu Business Line : IRDA working group to submit proposals — Norms soon for standalone health insurance cos

Mr Shantilal Daga (left), Chairman, Committee on Insurance, Institute of Chartered Accountants of India, and Mr C.S. Rao, Chairman, Insurance Regulatory and Development Authority, at the inaugural session of the National Conclave on Insurance in Hyderabad on Saturday. — A. Roy Chowdhury

Hyderabad , Nov. 6

IN a development expected to bolster health insurance coverage in the country, the working group appointed by the Insurance Regulatory and Development Authority (IRDA) is set to submit its recommendations pertaining to the healthy functioning of standalone health insurance companies in the country, according to the IRDA Chairman, Mr C.S. Rao.

On the sidelines of the National Conclave on Insurance organised by the Institute of Chartered Accountants of India here on Saturday, Mr Rao told journalists that the working group recommendations aimed at major policy changes with regard to capital requirements, solvency norms, investment guidelines and other regulatory measures for the growth of standalone health insurance companies.

Stating that a working group had submitted a set of suggestions regarding the need for a database on health industry experiences, Mr Rao said the regulator recently appointed another working group for collecting the data. The IRDA also appointed a working group to look into the issues pertaining to pre-existing diseases.

"Many of the insurance companies repudiate the claims of policyholders on the grounds that the schemes do not cover the pre-existing diseases. This is leading to a lot of dissatisfaction among policyholders. One should not be denied health insurance cover simply because he or she had suffered certain disease at some point of time in their life long ago. There should be some lock-in period for pre-existing diseases. We want the health insurance providers not to exclude the pre-existing diseases but to charge extra premium if they want to cover such diseases."

On the proposed partial detariffing of the motor insurance sector (own damage part) from the next fiscal, Mr Rao said the regulator had received feedback from the industry requesting the IRDA either to detariff the entire motor sector, both own damage and third party, or stop detariffing altogether.

Although there was some kind of consensus among the industry players to detariff the own damage part of motor insurance and keep the third party under the tariff regime, the industry is now not favouring partial detariffing of the motor insurance sector.

"Accordingly, we have decided not to rush in for detariffing and to hold a meeting with the industry players shortly to discuss their problems in detail," Mr Rao said.

New guidelines on corporate agencies soon: Expressing dissatisfaction over the functioning of corporate agencies, Mr Rao stressed the need to make full disclosures to the policyholders at the time of selling the policy.

"The policyholders should be informed of the limitations of the policy, the benefits of the policy and what benefits were covered and excluded under that particular policy at the time of selling the policy. The worry is some of the corporate agencies are not fully disclosing this crucial information to the policyholders.

"Apart from suspending the licences of some of the corporate agencies, we have also directed the insurance companies to stop issuing further corporate agency licences till the regulator comes up with revised guidelines on corporate agencies. The new guidelines are aimed at eliminating the `miss-selling' of insurance and we expect the guidelines to be ready in a month," the IRDA Chairman said.

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