Customers who are dissatisfied with the services of their health insurance company can now look forward to the Insurance Regulatory and Development Authority's (IRDA's) new guidelines on health insurance portability.
However, the new guidelines also raise doubts as companies may not be able to maintain the timelines for new proposals and customers too, may lose some benefits.
The Authority announced its rules to be implemented from 1 October 2011 through a circular for stand alone health insurance companies and other non-life insurance companies.
Insurance companies will be able to use a web-based facility created by the Authority to input all relevant details on health insurance policies issued by them to individuals who wish to move to another company. These details will be accessed by the new insurer.
Customers who want to migrate, must apply at least 45 days before the date of renewal of their present policy. The bonus accrued, if any, would be carried forward by the new insurer after migration, says the circular.
The transfer of data on policies to be migrated will be undertaken within seven days from the date of request. The new insurer will have to either accept or reject the proposal within 15 days after receipt of data from the old insurer. If the decision is not communicated within two weeks, the new insurer will be bound to accept the proposal.
Customers porting from an earlier insurer to a new one may be disadvantaged in the following ways:
1. Premium loading and the right to underwrite help insurance companies stop unwelcome customers from immigrating into their plans.
2. Companies also offer waivers to customers who do not have pre-existing diseases (PED). A customer who acquired a pre-existing condition after buying the initial policy will not be given a waiver as deterrence.
3. Portability is not recommended for customers who had no pre-existing diseases (PED) when they bought the policy initially. The reason being, the new insurer would have a standard four-year PED waiting period.
4. While it is imperative for the new insurer to consider every application, acceptance will be subject to the new company's rules. For example, if the old policy offers 90 days' post hospitalization treatment and the new insurer provides only 60 days, the new policy will have only 60 days' cover.
The plan is good for customers who have serious issues with their existing health cover providers. People who are covered under a group policy provided by their employer and do not have any individual policy of their own also stand to gain from this.
Again, smaller health insurance companies with good service may find health insurance portability advantageous as it will help attract new customers.