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Your health insurance renewal premiums may turn cheaper if insurance regulator IRDA has its way.
The Insurance Regulatory and Development Authority plans to rein in companies resorting to arbitrary hikes in renewal premiums on health policies in which benefits have been previously claimed.
Several insurers have been charging higher premiums on health policy renewal if the policyholder had made a claim in the previous year, IRDA Chairman J. Hari Narayan said at CII’s 6th Health Insurance Summit 2012 here on Wednesday.
The soon-to-be-issued regulations for health insurance, which is the fastest growing segment in the insurance industry, will squarely address the issue of “loading”, he said.
The extra amount charged by health insurers in renewal premium when claims are previously made is commonly referred to as “loading” in industry parlance. The draft norms for health insurance segment provides that “loading” must be done at the time of underwriting the policy and not at the time of underwriting the claim.
“The way regulation would be fashioned is when you are loading the premium, the loading cannot be on the basis of individual claim experience, it will have to be based on the behaviour of entire class”, Hari Narayan told newspersons.
Final IPO norms
On general insurance, Hari Narayan said that the draft IPO norms for general insurers would become final in the next two weeks.
“This year we have finalised the amalgamation norms for life insurers and IPO norms of non-life. So, these two will be made regulation soon. The insurance advisory council has already met… that is the penultimate step,” he said, adding that the IRDA board will consider these norms for approval.
On FDI in insurance sector, Hari Narayan said that the regulator was in favour of hiking the limit to 49 per cent from the current 26 per cent.
“Unless we go in for 49 per cent, we will not have the kind of capital required to underpin the growth of the insurance industry. This sector requires a lot of money, so unless we enable inflow...,” he said.
If banks can have FDI limit of 74 per cent, and asset management companies 100 per cent, there is no reason why it should only be 26 per cent for insurance companies.
Any hike in the FDI limit in insurance requires legislative change and Parliament approval.
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