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The Insurance Regulatory and Development Authority of India specifies additional norms for proportionate deductions in health insurance product designs when policyholders choose higher room categories. General and Standalone Health Insurance Companies must define associated medical expenses in policy contracts and exclude pharmacy, consumables, implants, medical devices, and diagnostics from that definition. Insurers must not apply proportionate deductions for intensive care unit charges, hospitals without differential billing, or expenses lacking differential billing. New health insurance products filed on or after 1st October 2020 must follow these guidelines. Existing policy contracts must comply upon renewal from 1st April 2021 onwards without changing the unique identification number.
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Ref: IRDAI/HLT/REG/CIR/151/06/2020
11th June, 2020
To
CEOs of all General and Standalone Health Insurance Companies
Re: Modified Guidelines on Product filing in Health Insurance Business- Norms on Proportionate Deductions
Reference is invited to the provisions of Clause (4) of Chapter II of Guidelines on Product filing in Health Insurance Business (Ref: IRDA/HLT/REG/CIR/150/07/2016) dated 29th July, 2016 (the guidelines) specifying norms on designing of health insurance products.
In addition to the norms specified in clause (4) of Chapter II of the guidelines, the following additional norms are specified.
Where as part of product design insurers propose proportionate deduction of the 'associated medical expenses' when a policyholder chooses a higher room category than the category that is eligible as per terms and conditions of the policy, insurers shall define 'associate medical expenses' in the terms and conditions of policy contract.
The following expenses are not allowed to be part of the definition of 'associate medical expenses'.
Insurers shall not recover any expenses towards proportionate deductions other than the defined 'associate medical expenses' while processing claims.
Insurers shall ensure that proportionate deductions are not applied in respect of the hospitals which do not follow differential billing or for those expenses in respect of which differential billing is not adopted based on the room category. This shall be clearly specified in the policy terms and conditions.
Insurers are not permitted to apply proportionate deduction for 'ICU charges' as different categories of ICU are not there.
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The provisions of these guidelines shall be applicable to the Health Insurance products filed as per Guidelines on Product Filing in Health Insurance Business on or after 01st October, 2020. All policy contracts of the existing health insurance products that are not in compliance with these guidelines shall be modified as and when they are due for renewal from 01st April, 2021 onwards.
Insurer shall modify the policy wordings of the existing health insurance products without any change in UIN to comply with these guidelines.
This has the approval of the competent authority.
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(D V Ramesh) General Manager (Health)
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