FM DECEMBER 2018 ISSUE - digital edition

health insurance
FEWER EXCLUSIONS
All health conditions acquired after policy inception should be
covered by insurers, moots IRDIA working group
BANO SARKAR
A
working group constituted
by Insurance Regulatory and
Development Authority of India
(IRDAI) under Suresh Mathur, Executive
Director (Health), IRDAI, to study the
standardisation of exclusions in health
insurance sector has submitted its
report.
The working group submitted
the report after carefully examining
the suggestions made by various
stakeholders and studying different
exclusions in India and the practices
followed in some of the developing
as well as the developed countries.
The working group also took into
consideration the state of the
healthcare sector in the country
and the lack of unity and regulatory
provisions in the sector.
Commenting on the report,
Vaidyanathan Ramani, Head of Product
and Innovation at Policybazaar.com,
said:“The report is very customer
friendly. The objective of the committee
is to try to reduce the ambiguity around
health insurance exclusions and make
them more standardised.”
In its report, the working group
recommended that all health conditions
acquired after policy inception, other
than those not covered under the
policy contract, such as infertility
and maternity, should be covered
under the policy and cannot be
permanently excluded. Thus, the
exclusion of diseases contracted
after taking a health insurance policy
will not be permitted. The group has
recommended that there should
not be any permanent exclusion
in the policy wordings for any
specific disease, whether they are
degenerative, physiological or chronic
in nature. According to the working
group, permanent exclusions can
be incorporated only at the time of
underwriting.
Vaidyanathan Ramani said the
working committee has recommended
that there should be only 17
defined exclusions which should be
permanently excluded. “The exclusions
will be clearly defined in keeping with
THE WORKING GROUP
RECOMMENDS ALLOWING
INSURERS TO INCORPORATE
PERMANENT EXCLUSIONS
WITH DUE CONSENT
OF THE PROPOSER
customer understanding. Broadly, only
17 exclusions will be allowed in general,
but in specific cases, ,exclusions may
come from the individual having a
severe condition and with their due
consent,” he said.
Limited waiting periods
The working group has also
recommended allowing insurers to
incorporate waiting period for any
specific disease. But it should be for a
maximum of four years. It suggested
the inclusion of sub-limits or annual
policy limits for specific diseases or
conditions in terms of amount, a
percentage of sum insured or by the
number of days of hospitalization
or treatment in the product design.
However, the working group added
that any limits or waiting periods
incorporated by the insurers as a
part of the product design shall be
based on objective criteria and sound
actuarial principles. Vaidyanathan
Ramani felt that the waiting period
must be reduced to 30 days for certain
conditions like hypertension, diabetes
and cardiac problems.
The working group has
recommended allowing insurers to
incorporate permanent exclusions
with the due consent of the proposer,
which will allow a wider section of the
population with serious pre-existing
diseases to avail of health insurance,
including persons with disabilities. It
has observed that non-declaration or
misrepresentation of material facts is
a major concern in health insurance
contracts. The insurance companies
generally invoke cancellation clause for
non-disclosure or misrepresentation.
The working group has recommended
that in such cases, the insurer can take
consent from the insured person and
permanently exclude the condition
and continue with the policy if the
non-disclosed condition is from the list
of the permanent exclusions. But if the
non-disclosed condition is not from
the list of permanent exclusions, then
the insurer can incorporate additional
waiting period for a maximum of 4
years for the condition non-disclosed
from the date the non-disclosed
condition was detected and continue
with the policy. This will not prejudice
the rights of the insurer to invoke the
cancellation clause under the policy for
non-disclosure or misrepresentation.
The working group has
recommended a period of eight years
of continuous renewals for raising
issues related to non-disclosure.
After this, claims shall not be
58 / FUTURE MEDICINE / DECEMBER 2018