Change health insurer without losing benefits from 1 October

After mobile number portability, another and even more far-reaching progressive step is on its way – health insurance portability, which will enable dissatisfied policy holders to change their insurance company without losing any of the benefits accrued under their current policy.

The Insurance Regulatory Authority of India RDA on Tuesday issued final guidelines which gives insurance companies directions on portability, which are expected to be implemented from 1 October.

Under these, a policyholder will have to approach an insurer 45 days before the policy with the old insurer expires, in order to give time for the new company to consider the application. The acquiring insurer will verify the claims history from a common database, which will cover two years of claims experience. Based on the data, the acquirer will decide whether to accept the proposal and the price it will offer.

The old insurer will be bound to provide additional data to the new insurer within seven days of receipt of the application, and the new insurer will have to either accept or reject the proposal within 15 days after receipt of data from the old insurer.

If the decision is not communicated to the policyholder within a fortnight, the new insurer will be bound to accept the proposal.

Besides benefiting those who are unhappy with the service provided by their current insurer, portability will also benefit those who are covered under a group policy provided by their employer and do not have any individual policy of their own.