IRDA chairman underlines that nobody should be refused an insurance but admits enforcement may be lacking  

May 16, 2012

Speaking at a Moneylife Foundation seminar, IRDA chairman J Hari Narayan also said prohibiting banks from selling insurance products is not feasible in India

Moneylife Digital Team

J Hari Narayan, chairman, IRDA (Insurance Regulatory and Development Authority), said no party should be refused an insurance policy and disability should not be a ground for rejecting insurance. It is also against the rules to refuse medical insurance to senior citizens, he said. However, he admitted that enforcement on the ground may need to be tightened. He was speaking at a small interactive session organised by Moneylife Foundation with senior citizens and physically challenged. The IRDA chairman said that he would look into the issues raised by the group of senior citizens and activists.

The IRDA chairman later addressed a packed public meeting on the topic whether sensible health insurance is possible in India. On prohibiting banks from selling insurance, Mr Hari Narayan said that this is not feasible in India, though countries like Canada do have such stringent policies. Issues relating to life insurance, mis-selling, bancassurance, lapsed policies and poor grievance redressal were also discussed.

Health insurance is a cause of concern for everyone. With rising medical inflation and annual hike in health insurance premium, quality healthcare seems to be a distant dream, except for the elite who can afford the expensive hospital treatment or pricey health insurance premiums, the activists said.

The common issues that most citizens face are rising health insurance premium, inability of senior citizens' to increase sum insured, TPA (third party administrators) and intermediary issues and restrictive mediclaim policies. There were complains that more and more claims are getting rejected for impractical reasons and cashless facility restricted to few hospitals.

Moneylife Foundation, in a memorandum presented to the Mr Hari Narayan, raised these and others issues along with suggested actions.

Regarding handling health insurance claims, Mr Hari Narayan pointed that the system was working well, by and large. He pointed out that last year out of the 47 lakh claims received, 9.4 lakh claims were rejected. He pointed out that 80% of the claims are met and the industry has paid out as much as Rs5,885 crore. More than half the claims were settled within 30 days. He pointed out that the most frequent claims are from fever due to unknown origin followed by cataract.

Sensible universal health cover for masses is certainly a possibility in India, the IRDA chairman said. The government-initiated products like RSBY (Rashtriya Swasthya Bima Yojna) has done well for the masses with premium as low as Rs400 per family for a cover of Rs30,000 sum insured. They cover primary and secondary health care. Arogya Shree is another success story in Andhra Pradesh which covers tertiary health care i.e. covering only if any procedure is performed. A product, which is a combination of two can be promoted to masses for bulk penetration. This can be offered to certain section of society at nominal cost.

The other half of the population, which is at a higher income level can buy this product at a higher rate, which will still be much lower than an individual mediclaim product. The product may be up to certain sum insured. If anyone needs higher sum insured, they can buy 'top-up' policy to cover over and above the sum insured, which is offered by this mass product, Mr Hari Narayan said.

The seminar was attended by a number of activists, experts and eminent citizens.