The Insurance Regulatory and Development Authority of India (IRDAI) has come up with several new initiatives to make India’s insurance sector more accessible to the general public.
IRDAI said it is doing away with old complicated procedures to ensure ease of business and convenience for customers to avail of insurance services. Here are a few sector-specific events and initiatives carried out by IRDAI between February 16 and March 15, 2023.
Third ‘Bima Manthan’
IRDAI organised its third “Bima Manthan” meeting in Hyderabad in February this year to discuss improved insurance delivery service in line with the banking industry.
The regulator launched the Enhanced Access and Service Excellence or ‘EASE’ to improve various insurance services, including quick grievance redressal and claims settlement. The session focussed on bringing convenience to the customers and boosts their confidence.
The event stressed on making insurance providers more customer-centric. The meeting, attended by industry leaders, deliberated on prompt claim settlement and grievance redressal processes.
Protection For All
IRDAI has asked insurers to launch products for persons with HIV/AIDS, mental illnesses, and persons with disabilities. It directed them not to refuse insurance coverage for these categories of the population. It hopes it will help them deal with these issues with proper insurance coverage.
Also, in a progressive step, IRDAI has removed the terminology “sub-standard lives” stated in the health insurance regulations. The sub-standard policy is the insurance cover issued to those who cannot be insured at standard rates.
This “unacceptable terminology” is not to be used now for referring persons with disabilities. The policy tenure will be for one year but renewable as per the regulatory framework, it said.
IRDAI mandates general and standalone health insurers to launch products for persons with disabilities (PWDs), persons with HIV/AIDS, and those with mental illness.
Insurance broker SecureNow said IRDAI had asked the general and standalone health insurers to launch and offer a specific cover for PWDs, persons who have HIV/AIDS, and mental illness.
Insurers were directed to ensure that no insurance proposal from the abovementioned categories is denied because of their health conditions. The policy tenure of the product shall be for one year and renewable as per the regulatory framework.
This is an excellent outcome because PWDs and those with mental illness or HIV have historically found it difficult to buy insurance.
Ease of Doing Business
IRDAI has clarified the treatment of “Inward Co-insurance” while reporting third-party motor obligations. The Insurance Act 1938 specifies that every insurer involved in general insurance business shall underwrite such minimum percentage of insurance business in third-party risks of motor vehicles as may be defined by the regulations.
In a circular, IRDAI said insurers who use co-insurance arrangements as a risk-sharing program, the inward co-insurance would not be taken into account for calculating minimum business requirements. The regulator said it aims to increase motor third-party insurance coverage and improve the participation of insurance providers in motor liability cover.
IRDAI’s new rules aim to increase the country’s motor third-party (MTP) insurance penetration and ensure all insurers participate in third-party motor liability cover.