In a bid to check the rising instances of fraud, the Insurance Regulatory and Development Authority of India plans to bring in more stringent regulations by standardising health insurance products.

The regulator feels that health insurance is picking up very fast, and so are fraud activities.

“We at IRDAI do believe that health insurance is picking up very fast, but so is the fraud,” the newly-joined member (finance), IRDAI, Vijayalaxmi Iyer, told PTI.

“We are coordinating with all the research bodies like laboratories, diagnostic centres and hospitals to establish standard norms for various services which are part of the health insurance segment,” she said.

It has been put on the IRDAI Web site asking for opinions from all related stakeholders, she said.

“After completing the procedures, we will send them for the approval of the IRDAI board,” Iyer, who recently superannuated from Bank of India as chairperson, said.

New regulations

She further said that the regulator is likely to come up with a new set of regulations for the health insurance sector within the next few months.

“The idea is to bring about an orderly and sustainable growth in the industry.”

The health insurance industry has generated Rs 20,442 crore in premium business in fiscal 2015.

In the forthcoming regulations, IRDAI is likely to focus on features of the product, greater transparency and disclosures in sales literature and disclosures on Web portals to disseminate suitable information for decision-making.

Health insurance rules

The regulator is also planning major changes to health insurance, which include incentives for healthy policyholders and a level-playing field for life and non-life insurers.

In its new draft rules for health insurance, the regulator has also said there could be higher solvency requirements for the group health segment. At present, 150 per cent is the solvency ratio required to be maintained by insurers at all times.

It also plans incentives like more attractive premium rates for healthy policyholders.

Existing rules do not allow pricing to be linked to fitness levels as there’s apprehension about the availability of data.

But insurers already offer health and wellness-based incentives to individuals, including spa coupons, gym membership discounts etc., to encourage healthy behaviour among customers.

IRDAI has also proposed that health insurance claims processing agencies should mandate hospitals to reflect the negotiated discounts on the bills so that the policyholders are aware of the actual rates.

That apart, the regulator has also proposed a minimum paid-up capital of Rs 5 crore for third-party administrators and a minimum working capital limit of Rs 1 crore.