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No more waiting! IRDAI imposes a three-hour deadline for settlement of health insurance claims

By Vaseline May30,2024

Insurance regulator IRDAI on Wednesday released a master circular on health insurance specifying that an insurer must decide on cashless authorization within an hour of the request.

The master circular on health insurance products revokes 55 previously issued circulars and is an important step towards strengthening policyholder empowerment and strengthening inclusive health insurance, IRDAI said in a statement.

“The circular has brought together at one place the health insurance policy rights available to policyholders/prospects for easy reference and also emphasizes on measures to provide a seamless, faster and hassle-free claims experience to a policyholder who purchases a health insurance policy and to ensure improved service standards across the health insurance industry, the report said.

Faster claims processing without cash

The master circular pitches for the aim of facilitating 100 percent cashless claims settlement in a time-bound manner.

“To decide on cashless authorization requests immediately and within one hour and on final authorization upon hospital discharge within three hours of the hospital request,” the report said.

Approval for Cashless facility:

  • Every insurer strives for 100% cashless claims settlement in a time-bound manner. Insurers will endeavor to ensure that the number of cases where claims are settled through reimbursement is kept to an absolute minimum and only occurs in exceptional circumstances.
  • The insurer will decide with immediate effect, but no later than the request for cashless authorization an hour after receiving the request.
  • Insurers can arrange special helpdesks in physical mode at the hospital to handle cashless requests and assist.
  • Insurers also grant pre-authorization to the policyholder through the digital mode.

Final consent for hospital discharge:

The insurer grants final permission within three hours of receiving the request for discharge permit from the hospital. Under no circumstances should the policyholder wait until he is discharged from the hospital.

If there is any delay three hoursany additional amount charged by the hospital will be borne by the insurer from the shareholder fund.

If the policyholder dies during treatment, the insurer will:

1. process the request for claims settlement immediately.

2. Have the remains (corpse) removed from the hospital immediately

Customer-oriented approach

Sanjiv Bajaj, co-chairman and MD of BajajCapital, said IRDAI’s recent circular, which sets a three-hour time limit for insurers to settle cashless claims, marks a significant step forward in customer-centric health insurance reforms .

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“By mandating faster cashless authorizations and encouraging insurers to offer a wider range of products, add-ons and extras, IRDAI is demonstrating its commitment to improving customer experience and satisfaction. These measures are expected to not only increase the uptake of health insurance across India but also promote higher levels of trust between insurers and policyholders,” Bajaj added.

“With stricter review processes and a focus on maintaining high customer service standards, IRDAI is creating a more transparent and reliable health insurance environment, which ultimately benefits consumers.”

Wider choice for policyholders

Sharing salient features of the master circular, it said, wider choice that can be provided by the insurers by making available products/add-ons/co-drivers by offering various insurance products for all ages, regions, medical conditions/all types hospitals and healthcare Providers that meet the affordability of policyholders.

It also specifies the Customer Information Sheet (CIS) that the insurer provides with each policy document.

It explains the basic features of insurance policies in simple words such as type of insurance, sum insured, coverage details, exclusions, sub-limits, deductibles and waiting periods.

In case of no claims during the policy period, the insurers can reward the policyholders by providing an option to opt for such No Claim Bonus either by increasing the sum assured or by reducing the premium amount.

It also talks about providing end-to-end technology solutions for effective, efficient and seamless policyholder onboarding, policy renewal, policy servicing and complaint handling.

For claim settlements, the policyholder does not need to submit any documents, but insurers and TPAs ​​must collect the required documents from the hospitals.

Regarding portability requests on the Insurance Information Bureau of India (IIB) portal, stricter timelines are imposed on the existing insurer and the acquiring insurers to act.

An insurer is liable to pay Rs 5,000 per day to the policyholder if the ombudsman’s order is not implemented within 30 days.

This master circular represents a groundbreaking effort to empower policyholders and ensure they receive the highest standards of care and service; promoting a climate of trust and transparency in the health insurance sector.

Complaints recovery

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  • The insurer must have a robust complaint handling system.

    The insurer’s response letter to any complaints will contain the contact details of the relevant insurance ombudsmen where his/her complaint can be escalated in the event that the policyholder is not satisfied with the redress offered by the insurer.

    Namit Singh Sengar

    Namit writes about personal finance, economics and brands. Currently contributing to

    first print: May 30, 2024 10:09 IST

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