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.