MASTER MIND FINNASSET: Facility To Allow Switch-Over To Another Co With Same Terms

Monday, February 14, 2011

Facility To Allow Switch-Over To Another Co With Same Terms

In a big relief to dissatisfied health insurance policyholders, sectoral regulator Irda on Thursday allowed them portability - shifting policies from one insurer to another on same terms - from July 1. "The regulator has examined various issues involved in the portability of health insurance plan and has issued necessary orders for effecting portability which will be implemented from July 1, 2011," Insurance Regulatory and Development Authority (Irda) said in a statement.

The portability facility will allow policy holders to switch over to another insurance company with the same conditions. "The accepting insurer shall provide cover, at least up to the sum assured in the previous insurance policy," the regulator said. The new facility will also help those policyholders who stick to one insurer throughout life for fear of losing the cover for pre-existing diseases (PED).

"It is essential to protect the policyholders against discontinuity and consequential loss of PED cover by making the health insurance plans portable across the insurance companies," Irda said. In general, health insurance policies have specific exclusions for PED for a specified period of cover during the initial year, and policyholders do not get this cover in the event of changing insurance firm. It was considered "detrimental to competition". Irda decision comes after it received several representations from consumer associations and policyholders for enabling portability of health insurance policies. Currently, the regulator allows portability of motor insurance polices.

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