Insurers are joining hands to set up a Health Insurance Council, an industry lobby which is aimed at clearing the hurdles for growth in the smallest segment of the insurance industry. The move is also aimed at standardising practices across companies, which would help policyholders get better services, industry sources said.
Unlike the Life and General Insurance Councils, the proposed industry body would have representatives from third-party administrators (TPAs) – the entities that handle claim settlement work – and even from hospitals, along with representatives from the insurance companies.
In the past, differences between the three key players in the health insurance business have stymied the growth of the segment, with penetration levels remaining low at about 14 per cent as of end-December last year. Also, there is no universal health cover in the country.
Insurers have not pushed the product due to the high claims ratio, estimated at over 100 per cent. This means that claims are higher than the premium earned. They have blamed policyholders for not disclosing ailments while purchasing a medical cover, as well as hospitals for inflating bills when an insured goes for treatment.
TPAs have also been blamed for not helping companies minimise claims even as they earn commission from the hospitals as well as insurance companies.
The proposal to set up the Health Insurance Council was mooted by a committee set up by the Insurance Regulatory and Development Authority (Irda) to look into the performance of TPAs. The committee is expected to submit its final report towards the end of the month, industry sources said.
The body will be headed by the secretary general of life and general alternately for a term of two years.
“We want the body to be in place at the earliest. But if the Insurance Act has to be amended, it will take longer. The whole idea is to bring uniformity in the system,” said Life Insurance Council Secretary General S B Mathur.