IRDA ASKS PSUS NOT TO FORCE ELDERS TO SWITCH TO NEW HEALTH PLANS Mumbai, March 17, 2008The Economic Times (Delhi edition) The Times of India (Delhi edition)
Insurance regulator Insurance Regulatory and Development Authority (IRDA) has asked state-owned insurance companies not to force senior citizens to switch to a new health insurance plan with lower benefits at the time of renewal of policies. The regulator has reiterated that insurers cannot raise rates on mediclaim policies by more than 50-75% of the previous year’s premium, following an adverse claims experience. With complaints pouring in from senior citizens, the regulator has set up a special cell to look into their complaints. The regulator has appointed R Srinivasan as officer on special duty, in charge of the cell based at IRDA’s Hyderabad office. Senior citizens who have problems with their mediclaim renewal can contact this special cell. The IRDA panel on health insurance issues faced by senior citizens mooted the idea. Senior citizens’ association has been clamouring for a special cell, given that health insurance accounts for over 15% of non-life premium. The IRDA panel had also recommended a health insurance pool under the aegis of IRDA to take over high risks cases, including the ones whose renewal premium is hiked by over 40%. A similar pool exists for motor third-party liability insurance. IRDA is yet to take a view on the pool for rejected health insurance covers. Incidentally, the regulator had put a similar cap on rates for third-party liability insurance a couple of years ago, even after it was decided to increase rates by over 100%. In a circular to public sector insurance companies, the regulator said that PSUs have already revised the premium rates in respect of mediclaim policies in April 2007. “The authority received several complaints from senior citizens that renewal premiums charged to them were exorbitant. The authority, therefore, advised all the public sector general insurance companies that: The loading of premiums if justified for renewals of mediclaim policies issued to senior citizens shall not exceed 50-75% of the premiums charged prior to the revision.” IRDA has also said, “Senior citizens shall not be compelled by the insurance companies to migrate to other health insurance products, if it is to the disadvantage of senior citizens. The above instructions are applicable to renewal cases only. The authority has now created a separate cell to attend to the grievances of senior citizens in respect of non-renewals or exorbitant increases in premium of mediclaim policies of public sector general insurance companies,” the circular said.
Insurance regulator Insurance Regulatory and Development Authority (IRDA) has asked state-owned insurance companies not to force senior citizens to switch to a new health insurance plan with lower benefits at the time of renewal of policies. The regulator has reiterated that insurers cannot raise rates on mediclaim policies by more than 50-75% of the previous year’s premium, following an adverse claims experience. With complaints pouring in from senior citizens, the regulator has set up a special cell to look into their complaints. The regulator has appointed R Srinivasan as officer on special duty, in charge of the cell based at IRDA’s Hyderabad office. Senior citizens who have problems with their mediclaim renewal can contact this special cell. The IRDA panel on health insurance issues faced by senior citizens mooted the idea. Senior citizens’ association has been clamouring for a special cell, given that health insurance accounts for over 15% of non-life premium. The IRDA panel had also recommended a health insurance pool under the aegis of IRDA to take over high risks cases, including the ones whose renewal premium is hiked by over 40%. A similar pool exists for motor third-party liability insurance. IRDA is yet to take a view on the pool for rejected health insurance covers. Incidentally, the regulator had put a similar cap on rates for third-party liability insurance a couple of years ago, even after it was decided to increase rates by over 100%. In a circular to public sector insurance companies, the regulator said that PSUs have already revised the premium rates in respect of mediclaim policies in April 2007. “The authority received several complaints from senior citizens that renewal premiums charged to them were exorbitant. The authority, therefore, advised all the public sector general insurance companies that: The loading of premiums if justified for renewals of mediclaim policies issued to senior citizens shall not exceed 50-75% of the premiums charged prior to the revision.” IRDA has also said, “Senior citizens shall not be compelled by the insurance companies to migrate to other health insurance products, if it is to the disadvantage of senior citizens. The above instructions are applicable to renewal cases only. The authority has now created a separate cell to attend to the grievances of senior citizens in respect of non-renewals or exorbitant increases in premium of mediclaim policies of public sector general insurance companies,” the circular said.
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