Insurance Regulatory and Development Authority of India
Circular
Ref. No:IRDAI/HLT/REG/CIR/152/06/2020
Date:11-06-2020
Guidelines on Standardization of General Terms and Clauses in Health Insurance Policy Contracts
1. OBJECTIVE:
The Objective of these guidelines is to standardize the general terms and clauses incorporated in indemnity based Health Insurance [excluding Personal Accident (hereinafter called as PA) and Domestic / Overseas Travel] products by simplifying the wordings of general terms and clauses of the policy contracts and ensure uniformity across the industry.
These Guidelines are issued under the provisions of Section 34(1) of the Insurance Act, 1938 read with Regulation 20 and Schedule III of IRDAI (Health Insurance) Regulations, 2016.
2. APPLICABILITY:
These Guidelines are applicable to all General and Health Insurers offering indemnity based Health Insurance (excluding PA and Domestic / Overseas Travel) products (both Individual and Group).
The provisions of these guidelines shall be applicable to the indemnity based Health Insurance [excluding Personal Accident (hereinafter called as PA) and Domestic / Overseas Travel] products filed as per Guidelines on Product Filing in Health Insurance Business on or after 01st October, 2020. All policy contracts of the existing health insurance products that are not in compliance with these guidelines shall be modified as and when they are due for renewal from 01st April, 2021onwards.
3. Other Provisions:
3.1 Where these general terms and clauses areused, Insurers shall incorporate the same wordings as prescribed in Annexure – 1 of these guidelines.
3.2 Insurers may incorporate other general terms and clauses in the product as per their product design in order to ensure an informed choice to the prospects/insured persons.
3.3 Insurers may suitably modify the general terms and clauses of the policy contract prospectively based on the Regulations or Guidelines that may be issued by the Authority time to time.
4. Definitions: The words used herein and defined in the Insurance Act, 1938, Insurance Regulatory and Development Authority Act, 1999 and Regulations notified thereunder shall have the same meaning as assigned to them respectively.
5. This has the approval of the competent authority.
(D V S Ramesh)
General Manager (Health)
Annexure – 1
Standard General Terms and Clauses:
1. Disclosure of Information
The policy shall be void and all premium paid thereon shall be forfeited to the Company in the event of misrepresentation, misdescription or non-disclosure of any material fact by the policyholder.
(Explanation: “Material facts” for the purpose of this policy shall mean all relevant information sought by the company in the proposal form and other connected documents to enable it to take informed decision in the context of underwriting the risk)
2. Condition Precedent to Admission of Liability
The terms and conditions of the policy must be fulfilled by the insured person for the Company to make any payment for claim(s) arising under the policy.
3. Claim Settlement (provision for Penal Interest)
i. The Company shall settle or reject a claim, as the case may be, within 30 days from the date of receipt of last necessary document.
ii. In the case of delay in the payment of a claim, the Company shall be liable to pay interest to the policyholder from the date of receipt of last necessary document to the date of payment of claim at a rate 2% above the bank rate.
iii. However, where the circumstances of a claim warrant an investigation in the opinion of the Company, it shall initiate and complete such investigation at the earliest, in any case not later than 30 days from the date of receipt of last necessary document. In such cases, the Company shall settle or reject the claim within 45 days from the date of receipt of last necessary document.
iv. In case of delay beyond stipulated 45 days, the Company shall be liable to pay interest to the policyholder at a rate 2% above the bank rate from the date of receipt of last necessary document to the date of payment of claim.
(Explanation: “Bank rate” shall mean the rate fixed by the Reserve Bank of India (RBI) at the beginning of the financial year in which claim has fallen due)
(Note to Insurers: The Clause shall be suitably modified by the insurer based on the amendment(s), if any to the relevant provisions of Protection of Policyholder’s Interests Regulations, 2017)
4. Complete Discharge
Any payment to the policyholder, insured person or his/ her nominees or his/ her legal representative or assignee or to the Hospital, as the case may be, for any benefit under the policy shall be a valid discharge towards payment of claim by the Company to the extent of that amount for the particular claim.
5. Multiple Policies
i. In case of multiple policies taken by an insured person during a period from one or more insurers toindemnify treatment costs, the insured person shall have the right to require a settlement of his/herclaim in terms of any of his/her policies. In all such cases the insurer chosen by the insured person shall be obliged to settle theclaim as long as the claim is within the limits of and according to the terms of the chosen policy.
ii. Insured person having multiple policies shall also have the right to prefer claims under this policy for the amounts disallowed under any other policy / policies even if the sum insured is not exhausted. Then the insurershall independently settle the claim subject to the terms and conditions of this policy.
iii. If the amount to be claimed exceeds the sum insured under a single policy, the insured person shall have the right to choose insurer from whomhe/she wants to claim the balance amount.
iv. Where an insured person has policies from more than one insurer to cover the same risk onindemnity basis, the insured person shall only be indemnified the treatment costs in accordancewith the terms and conditions of the chosen policy.
6. Fraud
If any claim made by the insured person, is in any respect fraudulent, or if any false statement, or declaration is made or used in support thereof, or if any fraudulent means or devices are used by the insured person or anyone acting on his/her behalf to obtain any benefit under this policy, all benefits under this policy and the premium paid shall be forfeited.
Any amount already paid against claims made under this policy but which are found fraudulent later shall be repaid by all recipient(s)/policyholder(s), who has made that particular claim,who shall be jointly and severally liable for such repayment to the insurer.
For the purpose of this clause,the expression”fraud”means any of the following acts committed by the insured person or by his agent or the hospital/doctor/any other party acting on behalf of the insured person, withintenttodeceivetheinsurerortoinducetheinsurertoissueaninsurancepolicy:
a) the suggestion, as a fact of that which is not true and which the insured person does not believe to be true;
b) the active concealment of afact by the insured person having knowledge or belief of the fact;
c) any other act fitted to deceive; and
d) any such actoro mission as the law specially declares to be fraudulent
The Company shall not repudiate the claim and / or forfeit the policy benefits on the ground of Fraud, if the insured person / beneficiary can prove that the misstatement was true to the best of his knowledge and there was no deliberate intention to suppress the fact or that such misstatement of or suppression of material fact are within the knowledge of the insurer.
7. Cancellation
i. The policyholder may cancel this policy by giving 15 days’ written notice and in such an event, the Company shall refund premium for the unexpired policy period as detailed below.
(Note to Insurers: Insurer shall specify the method of refund calculation)
Notwithstanding anything contained herein or otherwise, no refunds of premium shall be made in respect of Cancellation where, anyclaim has been admitted or has been lodged or any benefit has been availed by the insured person under the policy.
(Note to insurers: Insurer may relax this condition as per the product design)
ii. The Company may cancel the policy at any time on grounds of misrepresentation non-disclosure of material facts, fraud by the insured person by giving 15 days’ written notice. There would be no refund of premium on cancellation on grounds of misrepresentation, non-disclosure of material facts or fraud.
8. Migration
The insured person will have the option to migrate the policy to other health insurance products/plans offered by the company by applying for migration of the policy at least 30 days before the policy renewal date as per IRDAI guidelines on Migration. If such person is presently covered and has been continuously covered without any lapses under any health insurance product/plan offered by the company,the insured person will get the accrued continuity benefits in waiting periods as per IRDAI guidelines on migration.
For Detailed Guidelines on migration, kindly refer the link ………
(Note to Insurers: Insurer to provide link to the IRDAI guidelines on migration.Timelines for applying for migration may be relaxed by the insurer subject to product design)
9. Portability
The insured person will have the option to port the policy to other insurers by applying to suchinsurer to port the entire policy along with all the members of the family, if any, at least 45 days before, but not earlier than 60 days from the policy renewal date as per IRDAI guidelines related to portability. If such person is presently covered and has been continuously covered without any lapses under any health insurance policy with an Indian General/Health insurer, the proposed insured person will get the accrued continuity benefits in waiting periods as per IRDAI guidelines on portability.
For Detailed Guidelines on portability, kindly refer the link ………
(Note to Insurers: Insurer to provide link to the IRDAI guidelines related to portability.Timelines for applying for portability may be relaxed by the insurer subject to product design)
10. Renewal of Policy
The policy shall ordinarily be renewable except on grounds of fraud, misrepresentation by the insured person.
i. The Company shall endeavor to give notice for renewal. However, the Company is not under obligation to give any notice for renewal.
ii. Renewal shall not be denied on the ground that the insured person had made a claim or claims in the preceding policy years.
iii. Request for renewal along with requisite premium shall be received by the Company before the end of the policy period.
iv. At the end of the policy period, the policy shall terminate and can be renewed within the Grace Period of …… days (Note to insurers: Insurer to specify grace period as per product design) to maintain continuity of benefits withoutbreak in policy. Coverage is not available during the grace period.
v.No loading shall apply on renewals based on individual claims experience.
11 Withdrawal of Policy
i. In the likelihood of this product being withdrawn in future, the Company will intimate the insured person about the same 90 days prior to expiry of the policy.
ii. Insured Person will have the option to migrate to similar health insurance product available with the Company at the time of renewal with all the accrued continuity benefits such as cumulative bonus, waiver of waiting period. as per IRDAI guidelines, provided the policy has been maintained without a break.
12 Moratorium Period
After completion of eight continuous years under the policy no look back to be applied. This period of eight years is called as moratorium period. The moratorium would be applicable for the sums insured of the first policy and subsequently completion of 8 continuous years would be applicable from date of enhancement of sums insured only on the enhanced limits. After the expiry of Moratorium Period no health insurance claim shall be contestable except for proven fraud and permanent exclusions specified in the policy contract. The policies would however be subject to all limits, sub limits, co-payments, deductibles as per the policy contract.
13 Premium Payment in Instalments (Wherever applicable)
If the insured person has opted for Payment of Premium on an instalment basis i.e. Half Yearly, Quarterly or Monthly, as mentioned in the policy Schedule/Certificate of Insurance, the following Conditions shall apply (notwithstanding any terms contrary elsewhere in the policy)
i. Grace Period of ___ (Note to Insurers: Insurer to specify grace period as per product design) days would be given to pay the instalment premium due for the policy.
ii. During such grace period, coverage will not be available from the due date of instalment premium till the date of receipt of premium by Company.
iii. The insured person will get the accrued continuity benefit in respect of the “Waiting Periods”, “Specific Waiting Periods” in the event of payment of premium within the stipulated grace Period.
iv. No interest will be charged If the instalment premium is not paid on due date.
v. In case of instalment premium due not received within the grace period, the policy will get cancelled.
vi.In the event of a claim, all subsequent premium instalments shall immediately become due and payable.
vii. The company has the right to recover and deduct all the pending installments from the claim amount due under the policy.
14 Possibility of Revision of Terms of the Policy Including the Premium Rates
The Company, with prior approval of IRDAI, may revise or modify the terms of the policy including the premium rates. The insured person shall be notified three months before the changes are effected.
15 Free look period
The Free Look Period shall be applicable on new individual health insurance policies and not on renewals or at the time of porting/migrating the policy.
The insured person shall be allowed free look period of fifteen days from date of receipt of the policy document to review the terms and conditions of the policy, and to return the same if not acceptable.
If the insured has not made any claim during the Free Look Period, the insured shall be entitled to
i. a refund of the premium paid less any expenses incurred by the Company on medical examination of the insured person and the stamp duty charges or
ii. where the risk has already commenced and the option of return of the policy is exercised by the insured person, a deduction towards the proportionate risk premium for period of coveror
iii. Where only a part of the insurance coverage has commenced, such proportionate premium commensurate with the insurance coverage during such period;
(Note to insurers: Insurer may increase the free look period as per the product design)
16 Redressal of Grievance
In case of any grievance the insured person may contact the company through
Website:
Toll free:
E-mail:
Fax :
Courier:
Insured person may also approach the grievance cell at any of the company’s branches with the details of grievance
If Insured person is not satisfied with the redressalof grievance through one of the above methods, insured person may contact the grievance officerat ………….
For updated details of grievance officer, kindly refer the link……….
(Note to insurers: Address of the Grievance Officer and link having updated details of grievance officer on website to be specified by the insurer. Insurer to also specify separate contact details for senior citizens)
If Insured person is not satisfied with the redressalof grievance through above methods, theinsured person may also approach the office of Insurance Ombudsman of the respective area/region for redressal of grievanceas per Insurance Ombudsman Rules 2017. (Note to insurers: Insurer to specify the latest contact details of offices of Insurance Ombudsman)
Grievance may also be lodged at IRDAI Integrated Grievance Management System – https://igms.irda.gov.in/
17. Nomination:
The policyholder is required at the inception of the policy to make a nomination for the purpose of payment of claims under the policy in the event of death of the policyholder. Any change of nomination shall be communicated to the company in writing and such change shall be effective only when an endorsement on the policy is made. In the event of death of the policyholder, the Company will pay the nominee {as named in the Policy Schedule/Policy Certificate/Endorsement (if any)} and in case there is no subsisting nominee, to the legal heirs or legal representatives of the policyholder whose discharge shall be treated as full and finaldischarge of its liability under the policy.
