IRDA’s health insurance guidelines: Key consumer centric points ignored

IRDA came out with numerous initiatives last year including draft health insurance guidelines. While these will help to confine the role of TPA to claims processing and not settlement, there are vital issues that have been ignored

The Insurance Regulatory and Development Authority (IRDA) came out with landmark draft health insurance guidelines on 31st May 2012. While it addressed numerous important issues like lifelong renewal, claims settlement within 30 days of receiving all documents, refund on pre-insurance medical check-ups, separate grievance cell for senior citizens and so on, there are several other issues which have vexed mediclaim policyholders. On 16th May 2012, Moneylife Foundation had submitted a Health Insurance memorandum to IRDA chairman, J Hari Narayan, who was the chief guest at the event.

Here are some of the points from the Moneylife Foundation memorandum that are not taken up in the health insurance guidelines:

        Senior citizens disallowed increase in Sum Insured (SI) - Survivors of critical illness like cancer are also denied increase in SI by the insurance company. This is easily managed by the insurance company under the garb of “Right to Underwrite”.

Action required - There should be mandatory allowance for inflation-linked            increase in sum insured irrespective of past claims history. 

         Need to cover prosthetics and artificial limbs for disabled – The Challenging Ones NGO gave a memorandum to the IRDA chairman on 16th May 2012 requesting him to ensure that all insurance providers be mandated by regulations to offer mediclaim and accident cover policies to cover the cost of provision of prosthesis/artificial limbs to the insured person, up to the sum insured and without any artificial cap. At the moment, not all insurance companies cover the cost of prosthetics.            

Action required IRDA chairman had given positive feedback and immediately acknowledged the need for mediclaim to cover prosthesis. He was going to advice companies about it as there is increasing need for various types of implants. Unfortunately, even after reminders there is no action taken by IRDA.

          24 hour hospitalisation used as an excuse to reject claims - Today technological advancement does not necessitate hospitals to keep the insured for more than 24 hours in many cases. Insurance companies are rejecting claims under the garb of 24 hours hospitalisation.       

Action required More day-care procedures need to be added to mediclaim. IRDA should make insurance companies’ needs realistic rather than mechanically rejecting claims just because the stay in hospital was less than 24 hours.

         Lack of infrastructure to receive hospitalisation intimation - Many insurers have a strict 24/48 hour intimation rule for hospitalisation intimation and seven days for claim submission. There are other issues too. For instance, TPAs deny having received hospitalisation intimation. Sometimes they do not have 24-hour helpline, are closed on public holidays and weekends, or are short-staffed leading to endless wait time to get connected to a person. This prevents genuine hospitalisation intimation and is often exploited to reject claims mechanically.                                                                       

Action required - IRDA should take tough stand on such frivolous claims rejection. All insurers should have a 24-hour toll-free phone number, fax, email and SMS facility for customers or agents to intimate hospitalisation. Technology makes this both inexpensive and easy to provide. Email/internet and SMS should have an auto confirmation facility. It is not acceptable that genuine intimation within the timelines end up rejected with TPA’s denying receipt of intimation. 

         Cashless facility is restricted to preferred-provider-network (PPN) which does not include majority of high-end hospitals for government insurers. This issue is only for retail and not for corporate mediclaim policies.                                                                      

Action required If cashless is offered for corporate mediclaim, the same insurance company cannot disallow retail mediclam policies from getting same benefit. Just because individuals have less bargaining power, insurance companies can get away with it. Cashless facility must be re-started for retail consumers, at all Quality Council of India (QCI) accredited hospitals and nursing homes.  

At the Bombay High Court hearing (12 February 2013) of a public interest litigation filed by social activist Gaurang Damani,  IRDA legal representative stated that health insurance draft regulations have been approved by its board and it is now pending approval of Parliament. It means that there is less scope of the above-mentioned issues to be considered even though IRDA should have been proactive about it.

In the next article we will discuss pending issues that IRDA needs to address to improve life insurance customer satisfaction.

Read – IRDA’s consumer redress system -1: Lot of scope for improvement?

IRDA chairman makes war heroes happy; says “Insurance companies should cover essential implants

IRDA comes up with landmark draft health insurance regulations




3 years ago

please help me Email:[email protected]



In Reply to pratik 3 years ago

Pl contact moneylife Insurance helpline for guidence.

arun adalja

4 years ago

nowdays due to modernisation 24 hours is not required for medical treatment and claim cannot reject by insurance rejecting claim one has to do wrong things by staying more than 24 hours and increase in claim has to treat the things in practical way.

Ubaldo C DSouza

4 years ago

The IRDA is a somnolent body as I have pointed out in a previous post. Now they are stirring a bit to "pass the buck" to the TPAs who are progressively (if not altogether) being deregistered by hospitals, at least as far as cashless hospital treatment is concerned.


4 years ago

• 24 hour hospitalization used as an excuse to reject claims - Today technological advancement does not necessitate hospitals to keep the insured for more than 24 hours in many cases. Insurance companies are rejecting claims under the garb of 24 hours hospitalization.

One of my claim is REJECTED by MD India/New India Assurance-in spite of CLEAR Intimation given well in advance with complete diagnosis details from treating surgeon and Day care procedure.Hospitalisation was not done due to cost saving / reduction of medical expanses and was done at a small hospital.

I repent my decision of getting treated at a small hospital.I should have done the surgery at most expensive hospital with a stay of 2/3 days with almost 10/15 times cost !!!!!
( Sum assured was Rs.1,50,000/- while cost of surgery at a small hospital came to around Rs.12000/-)

In spite of ABOVE FACTS- my surgery claim is rejected both by New India/MD India and IRDA -( under excuse of HOSPITALISATION LESS THAN 24 hours ).My case is pending with Ombudsman-Mumbai since Dec 2011.

Insurance Ombudsman post at Mumbai is Vacant since Oct 2012 with OVER one year's backlog of cases.

Ex-Maldives president seeks refuge in Indian mission

The arrest warrant follows Nasheed’s failure to attend his previously scheduled trial hearing at Hulhumale’ Magistrate Court on 10th February as he was on a visit to India

Former Maldivian president Mohamed Nasheed sought refuge in the Indian High Commission in Male after an arrest warrant was issued against him by a local court which resulted in anti-riot police surrounding the complex.


The former president, who is due to attend a hearing regarding his detention of Chief Judge of the Criminal Court Judge Abdulla Mohamed in January 2012, was inside the Indian High Commission at 1:00pm on Wednesday afternoon following the announcement of the court order.


Nasheed is “seeking advice” in Indian High Commission, local media reported. Police have set up barricades around the High Commission area.


The court summons follows Nasheed’s failure to attend his previously scheduled trial hearing at Hulhumale’ Magistrate Court on 10th February.


The former president, who was on a visit to India after being granted permission by the court, arrived back in Male on 11th February.


Former IAF chief admits meeting middleman at cousin’s place, but denied allegations

Names of Tyagi’s three cousins have also figured in reports suggesting that they had also a role to play in clinching the deal

Former IAF (Indian Air Force) chief Air Chief Marshal SP Tyagi, who is embroiled in the VVIP helicopter scam, today admitted having met one of the alleged middlemen but claimed innocence.


“I have met Carlo in my cousins’ place but when you say you have contact with him, then the answer is no. What connection could I have with him? I want to tell you that the whole process started after I retired. The entire process of evaluation, trials and contracts took place in 2010,” Tyagi informed media persons.


The former IAF chief denied allegations that he was paid bribes to swing a Rs3,600 crore deal for procuring 12 choppers from Italian firm Finmeccanica to transport VVIPS.


“I am innocent. These allegations are totally baseless and I am denying them categorically. The deal was signed in 2010 whereas I retired in 2007 itself,” he said.


Names of Tyagi’s three cousins Julie, Docsa and Sandeep Tyagi have also figured in reports suggesting that they had also a role to play in clinching the deal. He denied that his relationship with his cousins had any business dimension.


Asked if he had changed any specifications for the contract to favour Finmeccanica, Tyagi said the “staff qualitative requirements for the VVIP choppers were frozen in 2003, much before I assumed the office of Chief of Air Staff, and the IAF did not change any requirements after that.”


Reports today suggested that Italian investigators have alleged in a preliminary inquiry submitted in an Italian court that business conglomerate Finmeccanica bribed SP Tyagi when he was chief of the Indian Air Force to swing the controversial AgustaWestland VVIP chopper deal in favour of the company.


After the arrest of Finmeccanica’s head on Tuesday in Italy in connection with the controversial deal, the Indian defence ministry ordered a CBI probe into the charges.




4 years ago

CBI Enquiry may not be sufficient.As Money Laudering also is involved, CVC & Anti Corruption department also are to be Involved . They can check all Peoples Bank Accounts,Phones Datas , etc to bring out Facts.

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