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IRDAI Guidelines On Standardization Of Exclusions In Health Insurance Contracts

The Insurance Development and Regulatory Authority of India (IRDAI) had recently proposed guidelines on standardization of exclusions in health insurance contracts and modification guidelines on product filing in health insurance, on which the regulator has asked for comments from the stakeholders till May 31, 2019.

The health insurance sector has undergone various changes and improvements over the last couple of years. IRDAI had set up a working group last year to standardize exclusions in health insurance policies. After examining the recommendations of the working group, the regulator has proposed to issue guidelines on exclusions in the health insurance products.

In the draft guidelines, the insurance regulator has proposed to exclude several critical illnesses such as genetic diseases, neuro development disorders, mental problems, and psychological disorders from health insurance policies.

In view of the increased number of health insurance companies as well as health insurance products in the market, IRDAI in draft guidelines has proposed that the health insurance industry while incorporating exclusions in the health insurance products, should adopt a uniform approach. With the rise in the number of insurance companies, every plan comes with its own list of diseases that are covered or excluded. Experts say the companies decide exclusions of a policy based on the product category, insured profile, benefits offered, risk appetite, and the target segment.

The guidelines include, health insurance companies can not incorporate any exclusions in the policy terms and conditions on diseases contracted after taking the policy. Also, exclusion of impairment of persons’ intellectual faculties caused by the usage of drugs, depressants as prescribed by a medical practitioner or stimulants, will not be allowed.

In the exclusions listed of the policy, treatment of mental illness, stress, psychological disorders or neurodegenerative disorders, should not be included. The draft also mentioned that age-related macular degeneration, menopause, and puberty-related disorder, behavioral and neurodevelopmental disorders, cannot be included in the exclusion list of an insurance contract.

A list of diseases that insurers were covering under their products which can be permanently excluded, were also mentioned in the draft guidelines, which included chronic kidney disease, HIV, malignant neoplasms, epilepsy, Alzheimer’s, Parkinson’s, pancreatic diseases, and AIDS, among others. The regulator also proposed that insurers should incorporate waiting periods only up to four years, for any specific diseases.

To rationalize and standardize the exclusions in health insurance contracts, the proposed guidelines were introduced, and every insurer needs to comply with it. The proposed guidelines are applicable to all general and health insurers offering indemnity based health insurance policies on which IRDAI has asked for comments from the stakeholders till May 31, 2019. – Financial Express

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