Insurance Regulatory and Development Authority of India

Ref. No: IRDAI/HLT/REG/CIR/XXX/ 01/2020

Date: 17-03-2020

In the health insurance contracts where there is a sub limit for room rent, in the event policyholder occupying a room with higher tariff, than the one that he is eligible, health insurance products, subject to product design, may stipulate recovery of proportionate deductions in respect of various associated medical expenses. In order to ensure uniformity. it is desired to put in place a uniform approach while applying proportionate deductions in health insurance claims when policyholders opt for room with a higher rent than the eligible limit under the policy. With this objective it is proposed to issue norms on making proportionate deductions and a draft circular is herewith attached.

All stakeholders are requested to forward their comments/suggestions on the proposed guidelines in the attached format.

Comments may please be forwarded to Dr Pankaj Sharma, Manager ([email protected]) before 2nd April, 2020

Executive Director (Health)
Insurance Regulatory and Development Authority of India,
Sy No: 115/1,
Financial District, Nanakramguda,
Hyderabad 500032

Insurance Regulatory and Development Authority of India


Dated: 17th March, 2020


CEOs of all General and Standalone Health Insurance Companies

Re: DRAFT Modified Guidelines on Product filing in Health Insurance Business – Norms on Proportionate Deductions

1. Reference is invited to the provisions of Clause (4) of Chapter II of Guidelines on Product filing in Health Insurance Business (Ref: IRDA/HLT/REG/CIR/150/07/2016) dated 29th July, 2016 (the guidelines) specifying norms on designing of health insurance products.

2. In addition to the norms specified in clause (4) of Chapter II of the guidelines, the following additional norms are specified.

3. Where as part of product design insurers propose proportionate deductions of the associated medical expenses when a policyholder chooses a higher room category than the category that is eligible as per terms and conditions of the policy, insurers shall define ‘associate medical expenses’ in the terms and conditions of policy contract.

4. The following expenses are not allowed to be part of the definition of ‘associate medical expenses’.

a. Cost of pharmacy;

b. Cost of implants and medical devices

c. Cost of diagnostics

5. Insurers shall not recover any expenses towards proportionate deductions other than the defined ‘associate medical expenses’ while processing claims.

6. Insurers shall ensure that proportionate deductions are not applied in respect of the hospitals which do not follow differential billing based on the room category. Towards this, the policy conditions shall be specified that the proportionate deduction would be applied only in case of a hospital that follows differential billing practice based on the room category occupied by a patient.

7. Insurers are also not permitted to apply proportionate deduction for ‘ICU charges’ as different categories of ICU are not there.

8. These guidelines will come in to force with immediate effect.

9. This has the approval of the competent authority.

(DVS Ramesh)

General Manager (Health)

16/2020 View(207 KB) 16-03-2020 F. No. 484/03/2015-LC(Vol.II) Electronic Sealing-Deposit in and removal of goods from Customs Bonded Warehouses


DRAFT Modified Guidelines on Product filing in Health Insurance Business – Norms on Proportionate Deductions 

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