Health Insurers to Decide on Cashless Authorization Within One Hour: Regulator Update

In a significant move aimed at empowering policyholders and promoting inclusive health insurance, the Insurance Regulatory and Development Authority of India (IRDAI) has issued a new master circular on health insurance. This circular, which replaces 55 previous directives, introduces several key reforms designed to streamline and enhance the health insurance experience.

Regulator Irdai released a master circular on health insurance specifying that an insurer will have to decide on cashless authorization within one hour of request

Key Highlights of the Master Circular

1. Faster Cashless Authorization

One of the most notable changes is the requirement for insurers to decide on cashless authorization requests within one hour. This rapid response is expected to alleviate stress for policyholders during medical emergencies and ensure timely access to healthcare services.

2. Consolidation and Clarity

The master circular brings together all entitlements in a health insurance policy into a single, easily accessible document. This initiative aims to provide policyholders with a seamless, faster, and hassle-free claims experience by clearly outlining their rights and benefits.

3. Wider Product Choices

Insurers are now required to offer a broader range of products, add-ons, and riders. These options cater to various age groups, regions, and medical conditions, ensuring that policyholders can find coverage that suits their specific needs and affordability.

4. Simplified Customer Information Sheet (CIS)

Every policy document will now include a Customer Information Sheet (CIS). This sheet explains the basic features of insurance policies in simple terms, including type of insurance, sum insured, coverage details, exclusions, sub-limits, deductibles, and waiting periods.

5. No Claim Bonus (NCB)

Policyholders who do not make any claims during the policy period may receive a No Claim Bonus. This bonus can be in the form of an increased sum insured or a discount on the premium amount, providing additional value to policyholders for maintaining good health.

6. End-to-End Technology Solutions

The circular emphasizes the use of technology to enhance policyholder experience. This includes solutions for effective and efficient onboarding, policy renewal, servicing, and grievance redressal.

7. Document-Free Claim Settlements

Policyholders will no longer need to submit documents for claim settlements. Instead, insurers and Third-Party Administrators (TPAs) will collect the necessary documents directly from hospitals, simplifying the process for policyholders.

8. Stricter Timelines for Portability Requests

The IRDAI has imposed stricter timelines for processing portability requests on the Insurance Information Bureau of India (IIB) portal. This ensures timely action from both the existing and acquiring insurers.

9. Penalties for Delayed Ombudsman Awards

Insurers are now liable to pay Rs 5,000 per day to policyholders if ombudsman awards are not implemented within 30 days. This measure aims to ensure timely justice and compensation for policyholders.

10. Immediate Release of Mortal Remains

In the unfortunate event of a policyholder’s death during treatment, hospitals are required to release the mortal remains immediately, ensuring dignity and respect for the deceased and their families.

Conclusion

The IRDAI’s new master circular represents a landmark effort to empower policyholders, ensuring they receive the highest standards of care and service. By fostering an environment of trust and transparency in the health insurance sector, these reforms aim to make health insurance more accessible, efficient, and user-friendly for all.