A common databank is needed to make portability work. We don’t have it

Portability will be a non-starter if the features of a policy are not easily portable—as there would be many impediments from the consumers’ angle. There can be a huge issue among the insurers as well, if they cannot, and do not, easily share your data. There is no centralised insurance databank in India which is an essential step to improve the delivery of health insurance in India. The regulator is working on a system of making medical history data available in electronic format across insurers but it is not clear when the system would be up and running.

According to industry experts, insurers, especially in the public sector, don’t have a core system and there is no sharing of data across even divisions of the same company. So, today, it is not easy to port a policy even within the same insurer across divisions. Authenticity of the medical history data with the insurer, in some cases, may be questionable and would lead to disputes after portability. The new insurer is completely at the mercy of the existing insurer to give accurate data.

In such a situation, insurance companies will have to implement the guideline which specifies that the medical details will be shared with the accepting insurer within seven days. Enormous efficiency will be required to achieve this. It may need major changes in processes and database infrastructure to retrieve information of one customer across several years of renewal.

This calls for an agency like the credit bureau, which will run a centralised databank containing all the medical details of customers (pre-existing diseases, claims history, insurance history, coverage limits and so on). There will be a need for a unique customer identification number. The current reports from Insurance Information Bureau are inadequate to achieve this goal. According to Sudhir Sarnobat, “There is a need for an independent agency similar to CIBIL (Credit Information Bureau (India) Ltd) to create a common insurance database. It need not be from the regulator. CIBIL took 10 years; an insurance database can be developed in five years. Insurers may have to put in capital to build it. It can be used to come up with correct premium pricing. The unique ID of the customer will offer ease of information without going to the branch or division of the insurer.” Dr Amarnath Ananthanarayanan, CEO and MD, Bharti AXA General, also feels that, “The evolution of a common database across insurers will be of tremendous benefit for insurers as it will be a risk assessment tool. It will help to understand and access risk and charge the right premium. If an insurer charges high, then they lose the customer; if low, then they will have losses; if right, then they will get customers. Currently, insurers sometimes play safe in underwriting with exclusions to stay out of risk. With a common database, there will be less exclusions and lower premium for good customers who maintain health.” But a database with different attributes of records would be useless. That leads to the fact that medical data of policyholders need to be standardised. The group insurance policyholders’ medical data is not captured by all insurers. Some data may be available with TPAs but it may be incomplete. The common database may not give complete information if data is missing.

With databases comes the issue of data protection. In the US, the Health Insurance Portability and Accountability Act (HIPAA) strictly regulates the sharing of health information; you have to give your written permission. For example, without your authorisation, your medical service provider cannot give your information to your employer, use or share your information for marketing or advertising purposes, or share private notes about your healthcare.