Guidelines on Filing of Minor Modifications in the approved Individual Insu

~uuft4 ~ ~Pi4141cfi ~ ffl ~ INSURANCE REGULATORY AND ir.iai DEVELOPMENT AUTHORITY OF INDIA Ref No: IRDA/HL T/CIR/MISC/151/09/2019 20th September, 2019 All CEOs of General and Stand Alone Health Insurance Companies Re: Guidelines on Filing of Minor Modifications in the approved Individual Insurance Products offered by General and Stand Alone Health Insurers on Certification Basis. A) Reference is drawn to Chapter Ill of Guidelines on Product Filing in Health Insurance Business (Ref: IRDA/HL T/REG/CIR/150/07/2016) dated 29th July, 2016, (hereafter referred as Guidelines on Product Filing) which specifies modification in terms and conditions of products under File and Use (applicable to Life, General and Health Insurers). Where Insurers require to carry out minor modifications in the approved individual insurance products, riders or Add-ons (hereafter referred as 'approved individual products), it is proposed to permit the Insurers to effect the minor modifications, on certification basis subject to complying these Guidelines. B) These Guidelines are issued under the powers vested in Section 34 (1) of Insurance Act, 1938 read with Regulation 2(i)(g) read with Regulation 2 (i)(o) of IRDAI (Health Insurance) Regulations, 2016. C) These Guidelines are applicable to the approved individual products of Health Insurance Business as defined in Section 2 (6C) of Insurance Act, 1938 offered by General and Health Insurers. 1. Minor Modifications allowed on Certification Basis: The following minor modifications are allowed on Certification Basis in accordance to the Guidelines prescribed herein. 1.1 Addition of premium payment options (frequency / payment of premiums in instalments). 1.2 Addition of distribution channels. 1.3 Change in the base premium rates, not exceeding + or - 15% of the premium rates of originally approved individual product. 1.4 Addition of approved standalone riders or add-ons to the approved individual health insurance products. 1.5 Minor Changes in Policy Wordings. L Page 1 of 8 -ifcr;:j-_ 115/1, ~~. iiliicfi•.:11-11:SI, ~ -500 032, 1=fffif Survey No. 115/1, Financial District, Nanakramguda, Hyderabad-500 032, India Q) : +91-40-2020 4000,m : +91-40-2020 4555 Q) : +91-40-2020 4000, Fax : +91-40-2020 4555 ~ : www.irdai.gov.in Website : www.irdai.gov.in 1.6 Change in the name of the approved product subject to complying with the provisions of Clause (4) (xii) of Chapter - II of Guidelines on Product Filing. 1.7 Change in sum insured options made available to policyholder within the sum insured range filed. 1.8 Decrease in minimum and/ or increase in maximum premiums. 1.9 Decrease in minimum and/ or increase in maximum entry age. 1.10 Extension of premium table to provide premium rates for lower and / or higher ages or longer and / or shorter policy terms or premium payment terms. 1.11 Expansion of the list of day care procedures to be offered. 1.12 Addition of Critical Illnesses covered under benefit based products. 2. Insurers may make one or more minor modifications referred to above on Certification Basis subject to complying with these Guidelines. The modifications referred herein shall be filed in FORM-IRDAI-FNU-HIP prescribed at Annexure - 1 of the Guidelines on Product Filing. 3. General Norms to be satisfied: Minor Modifications specified in Clause (1) above can be made only if all norms mentioned below are satisfied: 3.1 The proposed modifications shall not impact the benefit structure of the product including the manner of settlement of the underlying benefits. 3.2 The premium rates, terms and conditions under the modified product continue to be workable and sound, the assumptions are reasonable. 3.3 The premium rates under modified individual product are equitable amongst policyholders of different distribution channels. 3.4 Insurers shall not impose afresh any deductible, co-pay or sub-limits. 3.5 There shall be no change in the wordings of exclusions or time bound waiting periods of the underlying approved individual product. 3.6 The policy document, the prospectus and all other sales literature or insurance advertisements shall duly reflect the modifications made from the date of launch of the modified version of the product. 3.7 Except to the extent required to reflect the minor modifications effected, there shall be no other changes in the terms and conditions and the premium rate table of the approved individual product. 3.8 Any modification proposed under these Guidelines shall be subject to the provisions of IRDAI (Health Insurance) Regulations, 2016 as modified from time to time and the extant applicable regulatory framework. Page 2 of 8 3.9 There shall be a gap of at least 12 months between two applications (FORM- IRDAI-FNU-HIP) filed for effecting minor modifications under these Guidelines. 4. Specific norms to be satisfied under each modification: The following are the specific norms to be satisfied under each minor modification specified under Clauses 1.1 to 1.12 above: 4.1 Addition of premium payment modes (frequencies) under Clause 1.1 above: 4.1.1 There shall be no change in basic premium table and charging structure under the approved individual product to which new premium payment mode (frequency) is being added. Factors applicable, if any, to allow the change of premium payment mode (frequencies) shall be fair and reasonable. 4.1.2. The premium mode (frequency) proposed to be added may be monthly, quarterly or half yearly and the resulting premium amounts under each mode (frequency) are consistent with premium amounts under other premium modes (frequencies) of the underlying product. 4.1.3. The basis for arriving at the factors, if any, to be applied on the premium payment modes / frequencies proposed to be added or removed is disclosed in the prescribed Form (FORM-IRDAI-FNU-HIP). 4.2 Addition of distribution channels, under Clause 1.2 above: 4.2.1. There is no change in premium basis of approved individual product except the commission rates, rewards and expenses in respect of the distribution channels proposed to be added. There shall be no change in Basic Premium Rate Table. 4.2.2. There is no change in premium rates / charges and benefit amounts under distribution channels already existing under the approved individual product. 4.3 Change of base premium rates referred under Clause 1.3 above: 4.3.1 The ceiling of change of + or - 15% stipulated in Clause 1.3 above shall be reckoned for each age and term of the approved individual product and that no premium rate shall be over and above the ceiling stipulated subsequent to the minor modification effected. 4.3.2 The proposed increase is allowed subject to 'actual loss to expected loss' ratio exceeding 130% in each of the preceding three full financial years. 4.3.3 Change of premium rates resulting in the increase shall be only after expiry of three years from the date of launch of approved or modified individual product. Notwithstanding the provisions of Clause 3.9, there shall be a gap of at least three years from the date of change effected, before effecting any subsequent increase in the premium under these Guidelines. Page 3 of8 4.3.4 There is no change in any other parameter in the premium bases except underlying loss ratio of the preceding Three Years. 4.3.4.1 There shall be no change in the discounts and loadings specified under File and Use of the product. 4.3.5 Notwithstanding Clause 4.3.3, change of premium rates resulting in the decrease is allowed to be effected, at any given point of time, based on the underlying experience of loss ratio and other assumptions of the product subject to complying the norms specified in Clause 3.9 of these Guidelines. 4.3.6 The relation between adverse loss ratio and proposed premium change referred at Clause 1.3 shall be disclosed in the appropriate section of prescribed Form (FORM-IRDAI-FNU-HIP). There shall be no change in benefits, clauses, terms and conditions. 4.4 Addition of approved standalone riders or add-ons to the approved individual health insurance products under Clause 1.4 above: 4.4.1 There is no change in premium rates and benefits approved under the approved individual rider or add-on. 4.4.2 There is no change in premium rates and benefits approved under the approved individual health insurance product to which the rider or add-on is proposed to be added consequent upon the addition of rider or add-on. 4.5 Minor modifications referred under Clauses1 .5 to 1.12 above: 4.5.1 There is no change in the Base Premium Rate Table and other terms and conditions under the approved individual product and that the same basis is being used for calculation of premium rates / charges and benefit amounts under extended ages or changed premium payment term or changed policy term. Premium Rate Table may be extended to incorporate the required changes referred at Clause 1.10 above to the extent of proposed modifications. 4.5.2. Where there is addition of Critical Illnesses covered under benefit based products, as per Clause 1.12 above, the insurer shall ensure that the Definitions of Critical Illness are consistent with the Definitions specified in Guidelines on Standardization in Health Insurance Business, dated 29.07.2016 (Ref: IRDA/HL T/REG/CIR/146/07/2016) as modified from time to time. If insurer is covering any Critical Illness which is not defined as per said Guidelines on Standardization in Health Insurance, the insurer shall disclose the basis on which such definitions are adopted. A certification of the Chief Compliance Officer having obtained the medico-legal opinion that the definition is specific and clear shall be furnished along with the prescribed Form (FORM-IRDAI-FNU-HIP). Page 4 of 8