IRDA makes policy renewal mandatory for health insurers
02 April 2009
The Insurance Regulatory and Development Authority (IRDA) has made it mandatory for an insurance company to renew a health insurance policy, irrespective of the payments already made out in claims. IRDA has made it clear that delays of up to 15 days from the renewal date should be condoned by the insurers and they have to cover benefits given for pre-existing diseases.
The new IRDA guidelines, issued today, also warned insurers against arbitrary rejection of renewal of a health insurance policies. As per IRDA, the only exception for rejection of a health policy renewal could be fraud or misrepresentation of facts.
The new guidelines shall be applicable from 1 June 2009.
These new rules will come in handy for the old and those with medical conditions as they faced a lot of problem while renewing their health policies.
Under the new guidelines, an insurer cannot compel or force a customer to shift from one health insurance policy to another insurance product, except where the policy was being upgraded or discontinued with permission from the authority.
It has also asked the insurance companies to provide complete details about terms of renewing a health policy. IRDA said that the purpose of these guidelines was to enable the consumer to take an informed decision. The insurance companies will also have to state in clear terms if there are any changes in the payment of premium by the consumer.