Insurers can’t refuse to renew health policies

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.

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.

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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.”