The Insurance Regulatory and Development Authority (Irda) order allowing portability of health insurance policies beginning October 1 notwithstanding, insurers say that there are still many ‘loopholes’ and clarifications needed to ensure portability of health insurance.

For health insurance portability, on renewal, a policyholder will be allowed to shift to another insurance company, along with accrued benefits, such as no-claim bonus and waiting period for pre-existing diseases.

This is akin to mobile number portability allowed in the telecom sector by the Telecom Regulatory Authority of India (Trai). Health insurance portability has been allowed to ensure efficacy and cost-effectiveness of services provided by companies.

“There is still some clarity required on whether portability will be available only for hospitalisation policies or across health-related insurance products like daily cash allowance policy and critical illness policy, among others. However, the circular has removed scope for ambiguity around data-sharing among insurers by specifying the time periods for the process,” said Subrahmanyam B, vice-president and head of health vertical at Bharti Axa General Insurance.

All policyholders who want to shift to another insurer will have to inform their insurance company at least 45 days prior to the renewal date. Portability is applicable to all individual health insurance policyholders issued by non-life insurance companies.

At present, portability is not permitted among health insurance policies of life insurance companies. Even individual members of group health insurance policies (issued by a non-life insurance company) are allowed to migrate from a group policy to an individual policy with the same insurance company, along with all the benefits. After completion of one year, these policyholders will be allowed portability with other insurance companies.

Abhay Kumar, vice-president (retail) at Iffco–Tokio General Insurance, said, “Right now, there are a lot of different types of health insurance products available in the market. The policyholder needs to be extra-cautious while making a decision to switch from one insurer to another. For instance, a policyholder’s existing policy may have maternity coverage, but the new policy might not have that coverage. Data about the policyholder will be shared among the insurance companies on a need-to-know basis.”

“Product pricing will be important for new non-life insurance companies since they will have to conduct a proper risk evaluation for policyholders who are getting their health insurance ported. Keeping in mind the sensitivity of the policyholder’s health-related data, Irda has developed a mechanism for insurance companies so that they can exchange data. This will ensure privacy for the policyholder,” said D Rama, assistant vice-president for product development at Star Health and Allied Insurance.

sagarsen@mydigitalfc.com