Health insurance portability set to be effective from July 1st has put general insurance companies in a tizzy.
Last Tuesday, in Mumbai, underwriters of health insurance companies met up to discuss and voice their concerns regarding the challenges and practicalities associated with health insurance portability. The draft of the consensus will be sent by General Insurance Council (GIC) to the Insurance Regulatory and Development Authority (IRDA).
GIC is the representative body of general insurance companies in the country. On behalf of these general insurers, GIC will write to IRDA requesting the postponement of the effective date of health insurance portability.
Some of the concerns faced by these insurers are in relation to the lack of clarity in the guidelines issued by IRDA. Pricing of insurance policies is also a significant concern as these different companies have different exclusions and benefits. The premium of the insurance policy is decided after a detailed analysis of all the features of a health policy. Some underwriters are of the opinion that they should be given the freedom to decide the pricing of the ported policy.
Health insurance portability will be a relief for policyholders who want to switch to another insurer either for a better policy or for any service-related issues, etc. Currently, the main issue that prevents these customers from switching their health policy is their coverage of pre-existing diseases (PED). Most insurance companies have a waiting period of 4 years on any PED. Once the health insurance portability kicks in, the other insurance company will have to waive off the period of PED earned by the policyholder in the previous policy.
General insurance companies however are seeking clarity on various aspects of portability from IRDA which has set the effective date as July 1.
