The regulator proposes uniform definition of some key terms in health insurance.
IRDA recently released an exposure draft that standardizes the important definitions for various key terms like critical illness, pre-authorization and claim form, standard list of excluded expenses in hospitalization, standard agreement between the TPA and the insurer. The main objective of IRDA is to reduce ambiguity by defining the standard terms and procedures.
According to the draft, the access to health insurance still remains limited and complaints especially due to variable interpretations of key policy terms are enormous.
The draft further says that insurers should give all the 46 definitions in the policy document. “In view of resolving the differences in the definitions of terms on Critical Illnesses adopted by the different insurers which are creating confusion in the minds of consumers and the industry especially at the time when insurers and re-insurers have to arrive at a point where lump sum payment is made, 11 Critical Illness terms have been standardized to be adopted uniformly across industry, “ says the IRDA draft.
According to the exposure draft, critical illnesses include cancer, first heart attack, kidney failure, stroke, permanent paralysis of limbs, coma, organ transplant and multiple sclerosis. Further, the IRDA has allowed insurers to exclude certain diseases including skin cancer and HIV induced diseases from the 11 critical illnesses.
The draft also shares a list of 203 items whose expenses are excluded in hospitalization indemnity policy.
“This is an important step taken by IRDA because health insurance lacked proper definition about certain terms like critical illness. IRDA has suggested a standard agreement between TPA and insurer which will help us to standardize the charges. It has also suggested a common industry wide pre- authorization and claim form,” said Krishnamoorthy Rao, MD and CEO, Future Generali India Insurance.
The regulator has asked for feedback from all stakeholders within 10 days, starting from January 11.