From April, you can switch health insurer without losing benefits

NEW DELHI: Consumers may get the freedom to change their health insurance provider by next April, according to new guidelines being prepared by the industry in tandem with the sector regulator.

“We are working on the norms for portability,” said M Ramadoss, CMD of New India Assurance, the country’s largest general insurer. He is party to the discussions and said the final draft will be submitted to the Insurance Regulatory and Development Authority (IRDA).

Under the existing regulations, if a consumer is dissatisfied with a service provider he will have to buy a new policy from the firm of his choice. However, he will lose the benefits on his existing policy, most importantly the pre-existing illness cover. In the case of new health policies, existing illnesses are not covered for initial few years, and companies charge a heavy premium for waiving this off. Policy continuity is therefore important in the case of health insurance.

“It is a win-win situation for both the customer and the company,” says Sanjay Dutta head of health insurance vertical at general insurer ICICI Lombard.



While the customer gets to choose and pick the best service provider, the insurance companies stand to benefit from the sharing of data on the insured which will help prevent fraudulent claims, he added.

The draft regulations suggest the facility can be availed only in the case of similar products, in similar age groups having similar premiums across service providers.

Besides, portability or changing service provider would not attract any additional fee or charge. Portability criterion would include parameters such as age, premium charged for products offering coverage upto Rs 1 lakh, a person involved in the process told ET.

General insurers and the General Insurance Council had sent a draft of the guidelines for consideration of IRDA some time ago and are now giving it finishing touches in line with directions from the regulator.

Experts opine that portability may not really find favour in the country until issues such as movement from a group insurance product to individual product are addressed.
“Concept of portability may be difficult to implement unless all these grey areas are addressed,” said Nayan Shah, founder president of Third Party Administrators Association of India.