CHENNAI: Many customers only realise at the time of making a claim that their health insurance policy does not cover certain medical conditions or ailment. Policy holders usually depend on what has been told to them by their insurance agents, who sometimes overstate the coverage. To prevent such cases, the Insurance Regulatory and Development Authority of India (IRDAI) has asked insurers to group together all policy exclusions upfront in the policy document.

Misselling is a huge problem for the insurance industry as, of 1.72 lakh complaints in 2016-17, about 50% related to unfair business practices, according to IRDAI's consumer booklet 2016-17.

SBI General Insurance head (health) Puneet Sahni said, "Many a times, exclusions are lost in a maze of fine print. But the IRDAI has now said that the terms and conditions for claims, renewals have to be bifurcated. So that customers exactly know the coverage limits of their policy." Another change with the new regulation is the introduction of penal interest. "If customer is not paid the claim within 90 days of reporting, the insurer has to pay the bank rate + 2% interest for every day of further delay," said Sahni.

An important addition pertinent to policyholders is the regulator's insistence that the insurer mentions service parameters or turnaround time.

"Often, there is a delay in the settlement of claims. It could be a three-month or six-month delay, or more. And the insurer's lethargy over the claim would be made known to the public only when IRDAI publishes its annual report. Now the regulator is trying to increase accountability by insisting they put up on their website the average servicing time taken for claims - as approved by their board," said an executive at a private general insurer.

The 'IRDAI Protection Of Policyholders' Interests Regulations 2017', released a couple of days ago, said, "Every insurer shall display the service parameters and turnaround times as approved by the board in its website and keep the same updated as and when the service parameters are revised by the board."

With the prevalence of employer-paid health insurance, IRDAI now insists that the policy document mention upfront co-payer limits if the policy is co-paid by the employees. Insurers are also now required to update on their website the terms and conditions of every insurance product that is withdrawn or modified. And update the list at frequent intervals.