Health insurance plans are set to become more transparent and user-friendly, with the regulator directing companies to issue a sheet containing a concise summary of basic policy information and holders’ rights.
From January 1, 2024, policyholders will be able to quickly access key information, including coverage details, waiting periods, limits, sub-limits, and all exclusions. Moreover, health insurance covers will include a 15-day ‘free-look’ period which policyholders can utilise if they believe they have been subject to mis-selling.
While basic information is present within the insurance contract, it is often embedded in the fine print clauses of the policy. These terms are typically couched in legal language – a necessity due to the contractual nature of insurance policies.
The insurance regulator (Irdai) said the purpose of customer information sheets (CIS) is to “promote transparency and enhance policyholder awareness regarding their health insurance policies… empowering them with a deeper understanding of their insurance coverage”. Irdai said several complaints are arising due to an asymmetry of information between insurers and policyholders.
According to insurers, this move will reduce the occurrence of health insurance mis-selling by intermediaries. “The regulator aims to increase transparency and awareness to reduce grievances. The introduction of the customer information sheet will help minimise cases of mis-selling,” said T A Ramalingam, chief technical officer, Bajaj Allianz General Insurance.
In addition to basic details, the CIS will update customers about their rights by highlighting concepts such as ‘free-look’ cancellation, migration, portability, the moratorium period, guidance on the claims procedure, and contact information for grievance resolution.
Moreover, the CIS emphasises the policyholder’s obligation to make transparent and fair disclosures of material health-related information. Irdai said that failing to disclose such information may impact claim settlements. Insurers are now mandated to obtain the signatures of policyholders to confirm their receipt and understanding of CIS details.
According to Irdai, there were 52 lakh health insurance claims in FY22, of which 47.4 lakh were settled within one month, and 3.6 lakh were resolved between one and three months. The remaining claims were paid over a period of up to two years.
