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Unit 14: Trends in Insurance Sector

Health Insurance Notes

All the new insurance companies have been advised that they will carry out health insurance
business not as a stand-alone product but as a combined rider with existing life/non-life policies,
and introduce health products in the market. At the moment the health products available is of
the standard reimbursement type policy and its variants.
IRDA has recently notified regulations for Licensing of Third Party Administrators (TPA) –
Health Services in order to popularize health insurance. Health services rendered by a TPA shall
include services in connection with health insurance business. However this shall not include
the business of insurance company or the soliciting, directly or through an insurance intermediary
including an insurance agent. It is expected that TPAs will bring some sort of regulation regarding
standard and quality of treatment, period of treatment and rates.
The Authority is encouraging to business community to come forward to start exclusively
health insurance Company. Till date there is only insurer who is exclusively engaged in health
insurance business.

Public Complaints

Many customers of insurance companies approach the Authority – both formally and informally
for the settlement of their grievances. IRDA follows up for the settlement of these grievances on
the complaints on a continuous basis with the insurance companies. Timely attention is given to
these complaints and the insurers are advised to settle claims and grievances promptly
A system of grievance redressal has been built in the Authority supervised by one of its senior
officers. This system has proved useful to the Authority – not only to see that complaints get
attended to but also to give it an idea of the areas of working of an insurer where have to be
improved. The experience gained in this regard is reflecting in the regulations made by the
Authority.

Functioning of Ombudsman (a Person who Decides the Complaints of an Individual
on Insurance Matters)

The institution of Insurance Ombudsman has great importance and relevance for the protection
of interest of policyholders and also to build up their confidence in the system.
This institution has helped to generate and sustain the faith and confidence amongst the consumers
in insurers. The Insurance Council, which is the administrative body has appointed twelve
ombudsmen across the country and have provided them with the necessary infrastructure.
The companies are required to honour the awards passed by an Ombudsman within three
months. The awards are binding on the Insurance companies: the customer, however, can resort
to in case he decides on the insurance companies; the customer, however, can resort to its case he
decides to do so, other methods of grievance settlement.
The Insurance Ombudsman is empowered to receive and consider complaints in respect of
personal lines of insurance from any person who has any grievance against an insurer.
The complaint has to be writing, and addressed to the jurisdictional Ombudsman within whose
territory a branch or office of the insurer complained against is located. The complaint can relate
to any:
(a) Grievance against insurer.
(b) Partial or total rejection of claims by the insurer.

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