NEW DELHI: Insurance regulator IRDA
will soon come out with guidelines to prevent insurance companies from
arbitrarily hiking renewal premiums on health policies under which
benefits had been claimed previously.
"We have seen that if a party makes a claim in a given year, it is likely that the insurance company may increase the premium because you have made a claim.
"To some extent it means they are doing underwriting at the time of the claim. And that is not the way you do underwriting. That is what we are bringing it in draft regulations," Insurance Regulatory and Development Authority (IRDA) Chairman J Hari Narayan said at a CII event here. The IRDA said the norms would be part of the overall guidelines for the health insurance sector. Hari Narayan said while changing the premium, the insurers will have to take into account the experience of the entire class and not only individual. "The way it will 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 the entire class," he said.
Hari Narayan said the insurance company would have to assess the health risks of a policyholder at the time of selling the policy, as happens in most countries. "In health insurance, the problem is if you really want to assess what the health risk is on a given prospect, it requires quite a lot of time and medical intervention. So people (insurers) tend to do this later. They do it when a claim comes. I think that will change," he said. The health insurance sector grew by 33 per cent in the first six months of the current fiscal, up from 23 per cent last year.
"We have seen that if a party makes a claim in a given year, it is likely that the insurance company may increase the premium because you have made a claim.
"To some extent it means they are doing underwriting at the time of the claim. And that is not the way you do underwriting. That is what we are bringing it in draft regulations," Insurance Regulatory and Development Authority (IRDA) Chairman J Hari Narayan said at a CII event here. The IRDA said the norms would be part of the overall guidelines for the health insurance sector. Hari Narayan said while changing the premium, the insurers will have to take into account the experience of the entire class and not only individual. "The way it will 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 the entire class," he said.
Hari Narayan said the insurance company would have to assess the health risks of a policyholder at the time of selling the policy, as happens in most countries. "In health insurance, the problem is if you really want to assess what the health risk is on a given prospect, it requires quite a lot of time and medical intervention. So people (insurers) tend to do this later. They do it when a claim comes. I think that will change," he said. The health insurance sector grew by 33 per cent in the first six months of the current fiscal, up from 23 per cent last year.
