Health Insurance Pricing Freed After 3-Years Lock-in

The Insurance Regulatory and Development Authority of India (IRDAI) in its final norms on health regulations has said insurers can change the pricing of a health insurance product every year, three years after it's launch.Till now, product pricing could not be changed for three years.The regulator has said that after three years, the premium can be revised by the insurer depending on the experience.

However, it said such revised rates could not be changed for a further period of at least one year from the date of the revision.IRDAI said the premium for health insurance policies would be based on age and other relevant risk factors. The regulator also said for provision of cover under family floater, the impact of the multiple incidence of rates of all family members proposed to be covered would be considered.

IRDAI said insurers could also put in place procedures for offering discounts on premiums on renewals based on the fitness and wellness criteria stipulated and disclosed.While wellness and preventive elements as part of product design is encouraged, insurers cannot offer any discounts to policyholders on products of third parties either as part of policy contract or otherwise.With respect to products that are a combination of life cover offered by life insurance companies and health insurance cover offered by general insurers or health insurers, it said the premium components of both the risks must be separately identified and disclosed to policyholders.

IRDAI also said no life insurer could offer indemnity-based products either individual or group. All existing indemnity- based products offered by life insurers have to be withdrawn.In order to facilitate offering of innovative covers by insurers, IRDAI said "pilot products" could be designed and filed for approval. These can be offered only by general insurers and health insurers for a policy tenure of one year. Every pilot product can be offered up to a period not exceeding five years. After five years of launch, the product needs to be converted into a regular product or withdrawn.