Irdai proposes rationalization, standardised administration of group health policies

Insurance regulator -- the Insurance Regulatory and Development Authority of India (Irdai) has proposed rationalisation and standardised administration of group health policies. Issuing the 'exposure draft on group insurance products under health insurance business and other operational matters', it said group insurance facilitates enhancing the access to insurance to both formal and informal sectors of the society. It added if operated prudently, it offers the advantage of beneficial coverage at a moderate cost.

On underwritting and pricing aspects, the draft said the policy should specify the manner in which its risk and costs are analysed and factored into the premium cost. It said ‘All risk factors per unit of coverage such as individual, family, group floater, etc, should be separately analysed and priced’. Further, pricing should be based on sound actuarial principles, supporting data considering all the relevant aspects of pricing such as morbidity experience by gender, by age group, by occupation, by group size etc, expenses, terminations, profit margin apart from any other relevant criteria. It said ‘insurers must justify the rates and terms offered to any group to the authority, if called upon to do so’.

On servicing norms for the insurers and master policyholders, the draft suggested that all group health insurance policies having named beneficiaries should have ID cards issued to enable them obtain cashless services, wherever applicable. Master policyholder refers to the person to whom a group insurance policy is issued by an insurer. The draft further said unnamed policies may be issued by insurers provided the group has non-tamperable registers or records or procedures to identify the member insured/covered.