Health-tech firms offering subscription-based, ‘insurance-like’ products on IRDAI’s radar

Representative image

The Insurance Regulatory and Development Authority of India (IRDAI) is planning a series of measures to ease compliance burden for insurers, ensure faster regulatory approvals and increase insurance penetration in the country. Newly-appointed IRDAI chairman Debashish Panda on April 7 said that the regulator plans to form working groups to recommend easing of various processes and restrictions.

However, health-tech companies that offer individual customers subscription-based plans to meet their out-of-pocket as well as hospitalisation expenses will soon have to explain their actions to IRDAI. “We have come across such companies. We have called for data and have asked them to modify information on their websites. We will shortly come up with an action plan. We are taking this very seriously,” said TL Alamelu, Member (non-life) IRDAI. Such companies offer ‘alternatives’ to health insurance plans, but are not regulated by IRDAI.

Also listen: Simply Save: Know the importance of buying an adequate health insurance cover

Easier norms for new entrants in select segments?

The IRDAI plans to seek an amendment to the Insurance Act to ease minimum capital requirements – Rs 100 crore at present - for new entrants in certain cases. “A company focused on micro-insurance will not have high capital requirements. We also want specialised, niche players to enter the industry,” Panda said. If the proposal were to go through, the insurance regulator will have the authority to prescribe capital requirements on the basis of the applicants’ business plans and other details, instead of the minimum requirement being embedded in the Insurance Act.

Working group to review expenses management cap

The regulator has decided to form a working group comprising industry executives and IRDAI officials to submit recommendations on the cap on expenses of management - which includes commissions paid to distributors - that insurers have to adhere to. Breach of these limits invite regulatory action, including penalties and other restrictions.

Investment norms to be revisited

Current investment guidelines could also be rationalised, IRDAI chief said. “Current investment guidelines on assets under management are also being revisited. Industry is seeking more leeway to invest in riskier instruments, infrastructure financing and so on. We will apply our minds and take a re-look at the norm. At the end of day, the policyholder should get a better deal (returns on their investments),” he said.

Eye on COVID-19-linked insurer-hospital disputes

In the last two years, health insurance policyholders suffered even as health insurers and hospitals slugged it out over treatment pricing, cashless facilities and so on. Acknowledging that regulating hospitals is out of the IRDAI’s purview, Panda said that the issue will need intervention of health or other ministries. “This involves a third-party (hospitals). We have deliberated on the issue. We will need to reach out to the government to find a solution,” he said.

Also listen: How COVID-19 changed health and term insurance purchase  

More freedom to insurers on pricing?

Panda hinted that insurers could get more freedom to price their policies. “Even today, we are not fixing the prices, though there are some restrictions (hikes after three years, linked to claim experience etc). The market has to decide. We will review complaints from policyholders (on steep hikes in health premiums) and will keep an eye, but we will not micromanage,” Panda said.