In the previous instalment of CoverNote we saw some changes imposed by the insurance regulator relating to Health insurance. This was done through a consolidation of circulars on the matter into a Master Circular dated 29 May, 2024. Most provisions/ changes come into effect immediately and some have specified target dates for implementation.

One was ensuring coverage during grace period for renewal of hospitalisation policies (usually annual, but there are multi-year polices as well), and another was timely authorisation/ approval of cashless claims at the time of hospital admission, the insurer being responsible for financial implications of delays in this and also immediate approval of payment on discharge intimation.

The circular also lays down that if the policyholder should die during the treatment, the insurer ‘shall immediately process the claim and get the mortal remains of the deceased released from the hospital immediately.’

Here are some more moves.

When you renew a health policy and haven’t made any claim in the previous policy period, you are rewarded with an enhancement of the sum insured without additional premium. In motor policies, such a no-claim bonus is passed on as a discount in the renewal premium. Now this option is to be made available under health policies also and it is up to the insured to choose between the two.

A common doubt when making claims under a health policy is how does one claim under multiple policies. Many have coverage under group policies from the employer. In addition, they may be part of a group policy of some service provider, usually a bank or credit card issuer, or groups like professional bodies, alumni, retirees and so on. And of course they may have bought individual health policies as well.

The master circular, while repeating that the policyholder can choose to claim under any policy, adds that the “insurer of that chosen policy shall be treated as the primary Insurer.”

Insurers’ duty

This means that if the claim exceeds the coverage under that policy, it is now the duty of the insurer to seek information about other policies with the policyholder and coordinate with those insurers to settle the balance amount, “without causing any hassles to the policyholder”. This is as far as indemnity policies go which pay claims against expenses incurred.

In the case of benefit policies, where a flat sum insured is payable on the occurrence of a specified contingency, let us say on diagnosis of cancer, the policyholder can claim from all the insurers under all the policies he may have.

Moreover, this claim can be over and above the claims on indemnity policies since both policies operate on totally different bases.

The only thing that gives pause is that insurance companies apparently are approaching the regulator about some requirements in this circular. Hopefully this does not lead to any roll-backs or dilutions because there is still a long way to go!

(The writer is a business journalist specialising in insurance & corporate history)

Related Topics