In the midst of the regulator’s proposed sweeping changes, life insurers are optimistic that the IRDAI will grant them permission to sell health insurance.
The Insurance Regulatory and Development Authority of India (IRDAI) has indicated that it is considering allowing life insurers to sell indemnity health insurance.
A final decision on the subject has yet to be made. Additionally, recommendations for composite licences have been forwarded to the central government for consideration.
Prior to 2016, Indian life insurers sold indemnity-based health insurance policies. Changes in 2016 prohibited the practice, instead allowing life insurers to sell only fixed health benefit products such as critical illness and cancer coverage.
In contrast, general and standalone health insurance companies were to sell indemnity policies that work on a reimbursement or cashless basis.
The country’s largest insurer, LIC, has already expressed an interest in entering the market. Other participants have also stated that there are significant benefits in terms of lower underwriting costs, which could be passed on to consumers in the form of premium benefits.
The regulations’ contours are not yet clear, such as whether life insurers will sell general insurers’ health policies or design their own, with the latter being the preferred route for life insurers.
“Looking at the reach of life insurance companies today, it is significant.” If a person already has life insurance, health insurance can be sold to that person (by the same company). This will also increase insurance penetration, according to Tarun Rustagi, chief financial officer of Canara HSBC Life Insurance Company, who spoke to The Telegraph on Monday.
He went on to say that, depending on what is permitted, it could be plain vanilla insurance products or combination products.
Officials in the industry have warned that there may be opposing voices, particularly from general insurance and standalone health insurance companies that claim to have developed expertise in the indemnity health space and should not be denied the benefits of their efforts.
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