ARTICLE To print this article, all you need is to be registered or login on Mondaq.com. Background With a continually rising store size and growth of almost 20% every year, health insurance products have seen an improved uptake in current times. This growth is largely attributable to government initiatives and health insurance schemes launched across India as well as general increased awareness and ease of purchase amongst the more savvy urban population. While multiple health assurance offerings overseas serve access to a range of Wellness benefits such as free/ discounted fitness classes, gym memberships, spa and other alternate therapies, weight-loss consultations and membership to smoking cessation programs, offerings in India in this space have traditionally been restricted to personal accident and hospitalization covers. The question in favour of involving Wellness and protective benefits in insurance policies include that they would aim to improve the individual policyholders health as well as the Insurers own portfolio by significantly bringing down the claims ratio. In recent times, preventive measures are widely believed to provide value to the insurance industry as it helps policyholders avoid unnecessary treatment and hospitalization which in turn bring down the Insurers costs. current support The IRDAI (Health Insurance) limitation two thousand and sixteen (Health Regulations) first discerned and permitted common Insurers and Health Insurers to devise incentives and mechanisms to reward policyholders for continued renewals, agreeable claims experience, and preventive habits. The Health Regulations encouraged Wellness and preventive elements as a part of product design, but also simultaneously imposed requirements on Insurers to disclose such incentives and mechanisms upfront in the prospectus and policy document in accordance with the applicable product filing procedure, and factor the costs of such services into the pricing of the health insurance product. The IRDAIs Guidelines on Product litigating in Health Insurance Business of twenty-nine July two thousand and sixteen (Product Filing Guidelines) expand on the norms specified in the Health Insurance Regulations. part VII of the Product registering Guidelines, titled Guidelines on Wellness Features /Benefits, presently serves the certain edifice to be followed by all Insurers for offering Wellness features/ benefits as a part of their health insurance policies. The production registering Guidelines permit Insurers to design Wellness features with the equitable of promoting the improvement and maintenance of good health and require the benefits under these features to be accrued at a pre-declared rate/amount which is declared upfront to policyholders (and not linked to a dynamic factor such as an interest rate). Further, Insurers are asked to specify the manner of redeeming the benefits under each Wellness feature in the policy wordings and prospectus relating to such insurance product, and also disclose updated information on their website. Any errors or omissions in calculation of the accrued benefit is to be addressed through the Insurers in-house grievance redressal procedure. resultant tendency In 2017, in the context of insurance technology or Insurtech, the IRDAI also expressly recognised the role of Wellness oriented consumer technology in an Insurers risk assessment and product design. By path of its rotund of seven December 2017, the IRDAI shed up a working group to examine innovations in insurance involving wearable devices to measure personal fitness and incorporating a healthy lifestyle, stating that ...it is important to understand technology trends and their various implications for insurance even while seeking to harness the potential and advantages... While reassuring innovation, the regulator should run alongside it, keeping in view the interests of policyholders. amelioration Regulations The recently advised IRDAI form Insurance) (Amendment) Regulations 2019 (Amendment Regulations), published on 21 November 2019, brought certain amendments to the provisions of the Health Regulations. In relationship to the nature of the Wellness features, R19 of the Health Regulations accepted Insurers to provide particular health specific services such as Wellness benefits, in addition to the discounts offered by Insurers themselves on premiums. However, R19 of the matter Regulations expressly forbidden Insurers from promoting or offering (or offering any discounts on) products and services of third parties which are not their group Providers1. Particularly, R19(i) describe the shape of health certain services (including discounts of such services) that could be offered by such Network Providers, namely:Outpatient consultations or treatments, or Pharmaceuticals, or Health check-ups. One of the dominant correction included under the Amendment Regulations has been to the existing norms on Wellness benefits under health insurance policies. In this regard, R19 Wellness and protective aspects of the Health Regulations has now been entirely restored with the following: Insurers may endeavour promoting Wellness amongst policyholders of health insurance as per the guidelines as may be specified by the Authority from time to timeDue to the recently notified amendment, for the time being, there is certain uncertainty in the position of third party products and services offered by Insurers under the Wellness features of their products, until issuance of a final guidance by the IRDAI in this regard. disclosure Draft on Wellness The IRDAI has sung law Guidelines on Wellness and protective Features/Benefits of 7 November 2019 (Exposure Draft), which are proposed to supersede the present norms specified under Chapter VII of the Product Filing Guidelines on Wellness and preventive benefits. The Exposure Draft, as presently issued by the IRDAI, proposes to consolidate the provisions identifying Wellness and preventive benefits under the Health Insurance Regulations and the Product Filing Guidelines into one set of applicable guidance, and enhance the scope of services offered under Wellness and preventive features/benefits of health insurance products while ensuring that an informed choice is made available to policyholders. Some of the salient amelioration suggested under the Exposure Draft are as follows : The erstwhile R19 Wellness and protective aspects under the Health Regulations describe that no discount shall be offered on any third party service or merchandise and the regulatory framework only permitted an Insurer to offer (i) reduction on the insurance premium alleged by it, or (ii) discounts/benefits on certain health services (such as diagnostics, consultations and pharmaceuticals) suggested by its empanelled group Providers only. However, in a important change, the refraining R19 now stands deleted by the amelioration Regulations.
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