No health insurance schemes suspended due to non-compliances during last 3 years

The Minister of State Dr. Bhagwat Karad in the Ministry of Finance in a written reply to a question raised in Lok Sabha said, “No health insurance schemes were suspended due to non-compliances during the last 3 years”.

Shri Syed Imtiaz Jaleel asked these questions in the Lok Sabha:

Will the Minister of Finance be pleased to state:

(a) whether the Government has formulated any policy for rating of the Health Insurance companies on the basis of their performance and if so, the details thereof;

(b) whether the Government has lifted the regulations for the approval-seeking process to launch new products by the insurance company under use and file system and if so, the details thereof;

(c) whether the Government has taken note that the policies introduced under the use and file system lack sustainability and affordability for the targeted customers and if so, the details thereof; and

(d) the number of health insurance schemes suspended or withdrawn due to non-compliances during the last three years?

The Minister of State replied:

(a): The Insurance Regulatory and Development Authority of India (IRDAI) has mandated that insurers disclose 24 critical ratios, including Gross Direct Premium Growth Rate, Net Worth Growth Rate, Combined Ratio, Net Incurred Claims to Net Earned Premium, NPA Ratio, and so on, in a circular dated September 30, 2021. This reporting creates an atmosphere in which health insurance companies can be evaluated.

(b) and (c):To satisfy people’s health insurance demands and to make tailor-made products that fit the needs of diverse segments available, IRDAI introduced the ‘Use and File’ system for all types of products and add-ons or riders in a circular dated 01.06.2022. This new method allows for more innovation and a broader range of products for prospective policyholders.

The pricing of health insurance products is largely determined by the market conditions and the expenses of insurer management, claims experience, and so on. In terms of the Use and File process, insurers must ensure that the product pricing is viable, self-sustaining, and reasonable to the targeted market.

Furthermore, the pricing shall be based on generally accepted actuarial principles, and any price modification shall be based only on the underlying claims experience. To ensure that insurers do not regularly modify pricing, IRDAI has urged them not to revise prices within three years of the product’s introduction.

(d): During the last three years, no health insurance schemes have been suspended or revoked owing to noncompliances, according to IRDAI.