From June this year, non-life insurance companies can no longer reject renewing your health insurance policies on the ground that you had made claims in the previous years or arbitrarily increase your premium while renewing your cover. The grounds for such rejection have been made rare and exceptional.
The Insurance Regulatory & Development Authority (IRDA) has issued a circular to all non-life insurance companies stating that a health insurance policy shall be “ordinarily renewable except on grounds such as fraud, moral hazard or misrepresentation of facts.” The regulator has said that “specifically, renewal shall not be denied on the ground that the
insured had made a claim in the previous years.”
In case the insurer is proposing to increase your premium while renewing your policy, it will have to inform you three months before renewal and explain the reasons for increasing your premium and its quantum.
Explaining the move J Hari Narayan, chairman, IRDA told Hindustan Times, “There were several complaints from policy-holders who had claimed earlier that their insurers have refused renewing their policies next year without giving reasons for rejection.”
The prospectus of a health insurance policy will have to contain detailed upfront disclosures about the terms of renewal including information related to the coverage, likely premium for future renewals, the maximum age up to when the renewal would be available, any changes in the scope of the cover after a certain duration of the policy or after a certain age such as coverage of pre-existing diseases, whether renewal premium would be guaranteed or will be revised. Besides, insurers also have to state the premium being currently charged at different age slabs and details of the specific circumstances where your premium could be increased or discounts withdrawn.