Key Points
IRDAI protects senior citizens from excessive health insurance premium hikes
Insurers must seek approval for premium increases over 10%
Regulator aims to balance interests of insurers and policyholders
Standardizing hospital package rates for better affordability
In a notification, the insurance industry regulator made note of the steep increase in premium rates under some of the health insurance products offered to citizens aged 60 years and above.
According to the regulator, senior citizens constitute a vulnerable age group having limited sources of income and are most impacted in case of a steep increase in health insurance premiums.
"Insurers will have to consult the IRDAI if the premium is to be increased by more than 10 per cent," it further directed. As per the notification, insurers will also have to the consult IRDAI before withdrawal of individual health insurance products.
The notification also directed insurers to take steps for empanelment of hospitals and negotiate packages on lines of the Pradhan Mantri Jan Arogya Yojana.
Under the scheme, hospitalisation charges are negotiated centrally for package rates and are standardised across hospitals.
The IRDAI circular is an effort to balance the interests of both insurers and policyholders.
There has also been a long-standing demand for GST reduction on life and health insurance premiums. It is believed that if GST is reduced on insurance premiums, it will reduce the tax burden on both insurers and policyholders.
The Group of Ministers (GoM) has prepared a detailed report on GST decisions regarding various insurances, and exemption on the premium paid for the policies will be reviewed in the next meeting of the GST Council.
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