A public interest litigation has prompted the Insurance Regulatory and Development Authority to issue a draft guideline mandating insurance cover for HIV patients.
The regulator came up with the directions today, after a PIL challenged the practice of insurance companies rejecting benefits to HIV-positive patients. The Delhi High Court, calling it “unreasonable and unconstitutional”, had last May issued a showcause notice to the the regulator to explain its stand. The guideline will be implemented from October this year.
In fact, the draft of the document had been in the works for the last five years after then finance minister P Chidambaram first mooted the idea in response to a proposal from his Cabinet colleague Oscar Fernandes, who was then the labour minister.
Today, Irda, in the wake of the PIL filed by activist Rajeev Sharma, said “the Authority in exercise of its power vested under section 14(2) of the Irda Act, 1999, hereby issues this exposure draft to provide insurance cover for persons living with HIV and people vulnerable to HIV/AIDS, under health insurance policies of both life and non-life insurance companies”. The regulator has asked all the insurers to put in place an underwriting policy on health insurance coverage for persons suffering the deadly virus. Also, with regard to the existing policyholders, if one is diagnosed with HIV/AIDS during the tenure, insurers would not be able to deny any claims on that ground.
Insurers largely welcomed the step, but said the pricing of such a risk would an issue, as there is a lack of data and standard treatment protocol.
Currently, none of the existing insurance companies — barring one — provides any cover to HIV/AIDS. Moreover, most of the insurance health insurance policies include an “exclusion clause” rejecting insurance benefits of HIV/AIDS and related treatment.
As a result of this exclusion clause, if an existing policyholder is subsequently diagnosed with HIV/AIDS during the policy period, (s)he is denied the benefits of their existing insurance policy.
Bajaj Allianz General noted one of the main reasons why the insurance companies were not covering such risks was the lack of standard treatment protocol for treating HIV in the country. “Though things have improved, pricing of the products will be a challenge,” said Suresh Sugathan, the firm’s head (health operations). According to the draft guidelines, the underwriting policy will particularly address those individuals who are not yet showing symptoms of AIDS, but are in stage 1 or 2 HIV infection. Besides, it should be based on the compliance of the treatment protocols of the medication, Irda said.
“The policy shall indicate an eligibility criteria at the outset to consider the proposal for insurance cover to people living with HIV/AIDS (PLHA). Health insurance cover for PLHA shall not be denied if the eligibility criteria as per the underwriting policy are satisfied,” the regulator said.
However, the insurers will be allowed to charge or load the premia accordingly, which should be specified to the PLHA at the time of the policy is issued.
“With respect to persons who are HIV negative at the outset, and subsequently found to be HIV positive, the insurers shall not deny any claims on such grounds. In renewals however, suitable loading may be charged,” Irda said, adding that AIDS death should be covered as an insured event under the terms of the policy.
