Simplify policy documents in healthcare sector: IRDA

Insurance Regulatory and Development Authority (Irda) has asked the Life Insurance Council and industry trade bodies such as CII and Ficci to come out with recommendations to simplify policy documents in the health insurance sector.

To bring in more clarity, the regulator has suggested simplification of terms to bridge the gap in communication levels between insurers and the service providers.“Communication in health insurance has to become simpler and understandable by the policyholders,. We have suggested to the Council and other stakeholders to come out with recommendations for simpler communication in the policy documents” J Hari Narayana, chairman, Irda, said.

Due to complexities of the language, it is also fuelling in increasing number of frauds. Owing to poor understanding levels by the policy holders, the insurance regulator may also soon be making easy communication norms mandatory as opposed to those jargons, which are presently in use in the policy documents. 

Speaking at the first meeting of newlyformed Health Insurance Forum, he said about 37% of total complaints in general insurance were from health insurance. “Perhaps, this is due to lack of understanding of policy related aspects by the policyholders,” he said.

“While the tariffs in the industry is deregulated, language is still not deregulated,” he added. It is believed that the existing standard form of documents are sometimes confusing and misleading thus resulting in high claim levels.

On its part, Irda has standardised 20 common terms on health insurance policies, defined 10 critical illness and pre-authorisation forms, standardised claim forms, discharge forms and billing formats. “We have already standardised some of the processes in claiming the health insurance such as claim forms, discharge summary. We are yet to standardise the billing format.” Nandakumar Jairam, co-chairman, health services committee, said.

The forum is also discussing on some of the key issues concerning the healthcare providers such as communication between insurer and service providers, tariff and price regulated insurance and non-standardisation of medical procedures.

Irda had set up a health insurance forum that would eventually become a self-regulatory organisation in order to help promote health insurance. The forum would help in evolving policies and processes for the health insurance sector. The members of the forum would include CEOs of health insurance companies, life insurers, third party administrators (TPAs), officials from labour and health ministries and representatives of health service providers. Irda will act as a consultative agency between insurance companies and other stakeholders.

According to a TPA claims data from Irda, the regulator has received 3,641,585 during 2010-11 against 3,365,940 in 2009-10.

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