Specify reasons for rejecting health claims: IRDAI to insurers

The Insurance Regulatory and Development Authority of India (IRDAI) has cautioned insurers against not being transparent to policyholders while rejecting health insurance claims.

“Insurer shall ensure that the repudiation of the claim is not based on presumptions and conjectures,” the IRDAI said in a circular to Life, General and Standalone Health Insurance Companies as well as TPAs.

IRDAI said when a claim is denied or repudiated, the insurer should communicate the same, specifically mentioning reasons and also referring to the corresponding policy conditions. Details of the grievance redressal procedures available with the insurer as well as the Insurance Ombudsman along with addresses of the respective offices should also be furnished to the policyholders.

Besides processing of the claims in a “transparent, seamless and efficient manner within prescribed timelines,” the insurance companies should ensure the policyholder is provided with granular details of the payments made, amounts disallowed and the reasons for the amount disallowed. The regulator said it is essential for all insurers to establish procedures to let policyholders get clear and transparent communication at various stages of claim processing.

Systems to enable policyholders track status of cashless requests/claims filed with the insurer/TPA either through website/app or any other authorised electronic means on an ongoing basis have to be provided by the insurers. The status shall cover from the time of receipt of request to the time of disposal of the claim along with the decision thereon, General Manager (Health) D.V.S.Ramesh said in the circular.

Friday’s circular follows the one issued earlier this week, by the regulator, advising health insurers to refrain from modifying existing benefits or add new benefits in existing products that results in increase in the premium. Any addition to and upgradation of existing benefits can be made only as add-on covers or optional covers with a standalone premium rate.

Separately, IRDAI asked insurers to make special arrangements to facilitate eligible policyholders to get vaccinated against COVID-19 as a group or individually either at government or private facilities as per the option of the policyholders. The insurer should assist them by making arrangements through pre-booking slots and send reminders when the second shot of vaccine is due, IRDAI said.

Similar arrangements may be made for all employees of insurance companies as also agents “so that they can be made immune to future COVID-19 infection.”

The regulator did not specify whether the cost of the vaccination would be covered under the policies for those taking the shots at private hospitals. However, on Thursday the regulator had clarified that “in the unlikely event of hospitalisation following adverse reaction to COVID-19 vaccination, hospitalisation is covered under the health insurance policies subject to the specific terms and conditions of the policy.”