IRDA approves to make changes in covers of General Insurance
The Insurance Regulatory Development Authority (IRDA) on Friday granted permission to all non-life insurance companies to make amendments in their non-life insurance policies include health insurance schemes in terms of coverage, wordings, terms and conditions.
But, IRDA has also marked a bracket as per stating that all the made changes would be approved by IRDA. For this, IRDA is communicating with General Insurance Council (GIC), a self-regulatory body of non-life insurers, as it informed officially in Hyderabad.
“We are holding discussions with the GIC. Insurance companies can file with us the deviations from the Tariff Advisory Committee (TAC) wordings for each line of business and we will give the approvals on a case-by-case basis,” said C S Rao, the Chairman of IRDA.
But in the approval of the changes, IRDA would never overlook the insured’s welfare as it added in the statement, “The products should be comparable by customers across insurance companies.” This move will force a healthy competition among the insurance companies.
On the other hand, on the suggestion of TAC (an advisory committee of GIC that suggests it in wordings, terms and conditions for motor, fire, engineering, marine (hull) and workmen compensation policies), now non-life insurers are free to price the products.
Earlier, IRDA had proposed to grant relief to insurance companies by allowing them to make changes in insurance coverage on April 01, 2008 as several general insurance companies had complaint to IRDA to bearing loss in non-life insurance schemes especially in health insurance. But IRDA had postponed the deadline to prevent the customers from confusion.
But, IRDA is estimating that in near future the number of health insurance is likely to be multifold as the trend is now changing due to spreading awareness among Indian consumers regarding their health.
“The health insurance business is likely to grow by about 50% per annum,” said Rao.
“The health insurance segment has been growing much more than the overall general insurance industry and collection of premium of health insurance now accounts for about 16-17% of the total collection of the general insurance industry. When I became the chairman of IRDA in 2003, the collected premium under health insurance was only about Rs.600 crore, while the total collection premium of same became Rs.3,200-crore, a 35 % growth in 2006-07 as against last year’s premium, ” informed Rao.
However, ‘the figures for 2007-08 have so far not been released but are expected to be well over Rs 4,000 crore, as per he cited. “We will get a complete picture only after the April figures are released and we will intensify our inspection of insurance companies,” said Rao.
Viewing the large market of general insurance including health, several parties are preparing to come in the field in which some of them are planning to play a role of third party administrator (TPA), which would perform back-end functions for insurance companies.
However, IRDA is not willing to grant any fresh licence to TPAs as it stated, “The job of a TPA is to see if the claim is supported by evidence and if genuine claims should be paid quickly. In future, we will look at the TPA's IT ability, which we had earlier ignored while giving licences.”
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