Irda had first come out with a set of guidelines on health insurance portability on February this year and had fixed July 1 for its implementation. But insurers had sought time as the system to share and transfer data of the policyholders was not put in place. The insurance regulator later fixed October 1 as the new date.
Under the new norms, all individual health insurance policies issued by non-life insurers, including family floater policies, will be eligible for portability. The individual health insurance policyholder, which included family cover, will be able to transfer the credit gained by the pre-existing conditions, provided the previous policy has been maintained without any break. If the premium due on a given policy is not paid on or before the premium date or within 30 days, it will be considered as a break in policy.
The insurance company, on receipt of an application for porting, will have to give the applicant the portability form, the proposal form and other details of the various health insurance products that the company is currently offering. The new insurer will have to write to the existing insurer to get the details of the past and current medical history and claim records. All these data will be shared through the Irda’s web portal and will have to be mandatorily done within seven days of receipt of the portability form.
“Sharing of data was the major concern of insurance companies as they thought it will help rivals poach customers. But that is unlikely to happen now as the portal of sharing the data would be managed by Irda,” says Shankar Nath, founder of PolicyTi-ger.com, an online insurance comparison site.
Analysts say the bigger challenge will be to develop standardised rates for various ailments according to the facilities being offered by the hospital. In fact, last year, all public sector insurance companies had withdrawn their cashless facility as the claim-ratio had peaked and state-insurers suffered huge losses. Analysts also say that for the insurance portability to work, companies will have to come out with a new premium structure, which should be similar in nature for ailments and medical facilities that the hospitals offer. As insurance is a very price-sensitive issue, portability will have to ensure that dissatisfied customers get their value for money once they shift to a new insurer and the insurers will also have to ensure that the exclusions and policy features do not surprise the customer.
Antony Jacob, CEO, Apollo Munich Health Insurance, says it is important for the regulator, companies and customers to be clear as to how the system will work “because we have about 50 companies who are engaged in health, which includes life, general and specialist health insurance companies”. He adds: “The products vary in terms of features, limits, sub-limits and pricing and the regulator will have to understand how some of the finer processes and features will work when we flag off portability.”
RK Kaul, chairman and MD, Oriental Insurance, agrees: “As of now, there is no uniform health insurance policy for all companies. It’s time that that happens. The industry needs to work together as there is a lot of disparity between various policies offered by companies.”
Irda has stated that if the waiting period in the new policy is longer than the earlier one for the same disease or treatment, the additional waiting period should be clearly explained to the incoming policyholder in the portability form. In case of group health insurance policies, the individual members' shall be given credit based on the number of years of continuous insurance cover, irrespective of whether the previous policy had any pre-existing disease exclusion.
The cumulative non-claim bonus acquired from the previous insurer will be added in the new policy. For instance, if a policy holder has accumulated a bonus of R50,000 with the insurer and has a sum insured of R2 lakh, the total sum insured for the customer if he is porting the policy will be R2.5 lakh. If the new insurer doesn’t have any product in the R2.5 lakh-bracket, it would offer the policy in the nearest slab and charge the premium, accordingly.