IRDAI's Master Circular: A Quantum Leap in Health Insurance Policy Servicing and Claims Settlement

The Master Circular on Health Insurance Business provides comprehensive guidelines for insurers to offer customer-centric health insurance products. It emphasizes wide coverage, customization, advanced treatments, legal compliance, transparent communication, fair claims processing, and special provisions for vulnerable groups. The circular aims to enhance the overall health insurance ecosystem in India.

Product Offerings

• Insurers must offer products covering all ages, medical conditions, treatment types, and systems of medicine.

• Customization options should be provided to policyholders based on their specific needs.

• Products should cover advanced treatments and comply with relevant laws.

Policy Details and Customer Communication

• A Customer Information Sheet (CIS) explaining key policy features must be provided.

• Policyholders have a 30-day Free Look Period to review and cancel the policy if unsatisfied.

• Clear rules for nomination, premium payment, policy renewal, and migration are outlined.

Claims Processing and Coverage

• Policyholders can port their policy to another insurer without losing accrued benefits.

• Insurers must process claims efficiently and fairly, with guidelines for multiple policies.

• Cashless facility should be provided, with decisions on cashless requests within one hour.

• No Claim Bonus may be offered as increased coverage or premium discounts.

Grievance Redressal and Compliance

• Insurers must have a robust grievance redressal system and comply with Ombudsman decisions.

• Important information like claims handling policies must be displayed on the insurer's website.

Insurer Requirements

• Insurers must have board-approved underwriting and hospital empanelment policies.

• A Claims Review Committee should be constituted to oversee claim decisions.

• Insurers should strive for 100% cashless services and faster claim settlements.

• Training should be provided to intermediaries, distribution channels, and employees.

Third-Party Administrators (TPAs)

• Insurers must monitor the performance of TPAs and ensure compliance with regulations.

• A Product Management Committee should be formed to oversee product development and management.

Product Filing and Withdrawal

• Guidelines for filing new products and add-ons/riders are provided.

• Insurers must inform policyholders about the possibility of product withdrawal and provide suitable migration options.

Hospital Discharge and Claim Settlement

• Insurers must grant final authorization for hospital discharge within three hours of receiving the request.

• If there is a delay beyond three hours, the insurer shall bear any additional charges from the shareholder's fund.

• In case of the policyholder's death during treatment, the insurer shall immediately process the claim and release the mortal remains.

• Insurers and TPAs shall collect required documents from hospitals, and policyholders need not submit them.

Miscellaneous Provisions

• Specific coverage for persons with disabilities, HIV/AIDS, and mental illness must be offered.

• Insurers must submit periodic returns on premiums and claims.

• This circular supersedes previous guidelines and circulars related to health insurance.



The circular provides clear guidelines on how claims should be handled when policyholders hold multiple health insurance policies:

For Indemnity Policies:

• The policyholder can choose to file the claim with any insurer as per their preference. The chosen insurer will be treated as the primary insurer.

• If the claim amount exceeds the sum insured under the primary policy, the primary insurer must proactively reach out to the other insurers with whom the policyholder holds policies.

• The primary insurer shall coordinate with the other insurers to settle the balance claim amount as per policy terms, without inconveniencing the policyholder.

For Benefit Policies:

• Since benefit policies pay fixed amounts on occurrence of the insured event, the policyholder is entitled to claim from all insurers with whom they hold such policies.

• Each insurer is liable to pay the full benefit amount as per their policy, irrespective of whether claims are made with other insurers or not.

These provisions ensure that:

• Policyholders can get their total eligible claim amount settled seamlessly in case of multiple policies

• There is no scope for dispute between insurers regarding their liability to pay

• Policyholders are not put to any hassle of dealing with multiple insurers for settlement of a single claim

Based on the information provided in the Master Circular, the key objectives appear to be:

• Ensuring insurers offer comprehensive health insurance products that cater to diverse customer needs across all ages, medical conditions, treatment types, and systems of medicine. This promotes wider access to health insurance.

• Mandating clear communication and transparency from insurers to policyholders about policy features, terms and conditions, claims processes etc. through standardized documents like the Customer Information Sheet (CIS). This empowers customers to make informed decisions.

• Establishing policyholder-friendly norms for policy servicing aspects like free-look period, renewal, migration, portability, nomination etc. to provide convenience and continuity of coverage to customers.

• Prescribing turnaround times and laying down processes for efficient, timely and fair settlement of claims by insurers, with emphasis on cashless facility. This ensures customers can avail required treatment without financial burden.

• Requiring insurers to have robust grievance redressal mechanisms and comply with Ombudsman awards. This provides effective recourse to policyholders for the resolution of complaints.

• Directing insurers to constitute internal committees for monitoring product design, claims review, advertisement approvals etc. and stipulating board-approved policies on key aspects. This ensures regulatory compliance and governance.

• Providing special coverage for vulnerable customer segments like persons with disabilities, mental illness, HIV/AIDS etc. This promotes inclusive insurance.