On 29^th May 2024, Insurance Regulatory and Development Authority of India (IRDAI) notified the Master Circular on IRDAI (Insurance Products) Regulations 2024- Health Insurance. This master circular was effective with immediate effect i.e., 29^th May 2024.

This circular is in addition to IRDAI (Insurance Products) Regulations 2024 and shall be read with IRDAI (Protection of Policyholders’ Interests, Operations and Allied Matters of Insurers) Regulations, 2024.

Existing Insurance products that don’t comply with the provisions of IRDAI (Insurance Products) Regulations 2024 or Master Circular on IRDAI (Insurance Products) Regulations 2024- Health Insurance must be changed by September 30, 2024. Such changes shall be implemented with the approval of the Product Management Committee (PMC) under the extant Unique Identification Number (UIN).

This circular is subdivided into 3 Chapters as under.

1. Chapter I talks about General Information for the Policy Holder/Prospect/Customer.
2. Chapter II talks about Broad Requirements to be complied with by the Insurer for offering Health Insurance Business.
3. Chapter III talks about some miscellaneous provisions related to submission of returns, and model policy for persons with disability/HIV.

Key Features:

1. Customisation in Policies and Products: Now Customers have options for a greater range of products and add-ons to protect assets, risks, and liabilities from various situations. This further enhances the flexibility and provides greater product options to best cater varied customer needs.
2. Customer Information Sheet (CIS): This sheet would provide easy-to-understand policy details, exclusions, warranties, and claim settlement procedures, comprising coverage scope, etc. to ensure transparency and provide greater clarity for policyholders.
3. Simplified Claim Procedure: Claims cannot be dismissed because of any deficiency in the documents. Documents will be requested during underwriting, and only will be required for claim settlement if cashless options are not available.
4. Product Cancellation: Consumers have an option to cancel their insurance policies at any time by notifying the insurer. On the other hand, Insurers can only cancel plans if fraud is proven, with proportionate premiums refunded for the remaining period. After the Moratorium Period, which is 60 months of continuous coverage, health insurance policies and claims cannot be challenged for non-disclosure or misrepresentation until proven fraudulent.

5. Grievance Redressal Mechanism: Insurers shall setup a robust grievance redressal mechanism in place to address all their customer concerns. Further, Details like the insurance ombudsman’s contact details, where the grievance can be escalated, etc. must be included in the insurer’s response letter to any complaints.

6. Submission of Returns: Insurers are required to submit periodic returns on Premium, claims etc. as per the provisions of the master circular on submission of returns issued by the Competent Authority. Recently, Circular IRDAI/NL/MSTCIR/RT/93/6/2024 was notified by IRDAI on 14^th June 2024 for the same.

Compliance of Other laws by Insurers:

Insurers shall offer products following the relevant provisions of the below-mentioned Laws.

1. The Mental Healthcare Act, 2017;
2. The Rights of Persons with Disabilities Act, 2016;
3. The Surrogacy (Regulation) Act, 2021;
4. The Transgender Persons (Protection of Rights) Act, 2019, and
5. The HIV and AIDS (Prevention and Control) Act, 201

Repeal of the Guidelines /Circulars:

Circulars Mentioned in Annexure VI of the notification are repealed with immediate effect.

IRDAI aims to enhance transparency, accountability, and accessibility of the insurance market in India for its customers. The Insurer may extend the benefits arising out of the revised regulatory framework to the existing policyholders.

Disclaimer:  This is an effort by Lexcomply.com, to contribute towards improving compliance management regime. User is advised not to construe this service as legal opinion and is advisable to take a view of subject experts.