Tag: irdai

IRDAI panel not in favour of standardisation of cyber insurance, BFSI News, ET BFSI

Banking & Finance

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An IRDAI working group has opined against standardisation of cyber liability insurance as it might impede innovation and hinder adaptation to evolving industry needs. In October last year, the Insurance Regulatory and Development Authority of India (IRDAI) had set up the working group to study cyber liability insurance and suggest among things, possibility of developing standard coverages, exclusions and optional extensions for various categories.

Cyber insurance policy is a risk transfer mechanism for cyber risks.

The panel, as per its report published by the regulator, examined various aspects relating to cyber insurance in India, including coverage issues, sector wise exposures, underwriting/ pricing methodology, and claims response and management to come to an informed conclusion on standardisation.

“The Working Group believes that early standardisation of cyber insurance in India, might impede innovation and hinder adaptation to evolving industry needs. It may lead to price-based competition instead of developing competencies for agility to design new products suitable to new environments,” the report said.

It further said that while standardisation of cyber insurance policy seems to be a very good approach, at present it faces many challenges. Cyber insurance is a response mechanism to cyber risks which are dynamic and evolving.

Standardisation may not be able address all the emerging risks and is likely to limit innovation, said the report on which IRDAI has invited comments by February 9.

“Cyber insurance, at present, is much dependent upon support of reinsurers who instead of a standardised wording may prefer to use coverage and exclusions as per the latest developments in the market,” said the report, and added that cyber insurance, being a relatively new product, calls for flexibility for gaining traction.

The report also noted that cyber insurance policies, currently available, address the requirements of individuals reasonably well.

But, there are some areas in the product features and processes which need improvement.

It has recommended that there should be flexibility with regards to insistence of an FIR at the time of claims. It also suggested there should be clarity in exclusion language relating to compliance with reasonable practices.



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How to get your insurance complaints addressed

Personal Finance

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Insurance products, be it life, health or motor-related can be somewhat difficult to understand in terms of coverage, exclusions and other aspects such as sub-limits, co-payments and no claim bonus. While the awareness about insurance products is slowly improving, it is still low compared to the same in developed nations. This leaves room for misrepresentation, mis-selling and sometimes even fraud.

For instance, recently some “policyholders” of Bajaj Allianz General Insurance company tried to make a claim on their motor insurance policy. But the insurer didn’t settle their claims as the policies held by them were fake. Though the insurance company claims to have taken the necessary steps against the fraudsters, it was the “policyholders” who were left in the lurch. While these individuals will have to fight it out in court, others who hold a genuine policy have recourse in case of any issues.

So, if you are an aggrieved policyholder, here is how you can file a complaint.

First step

If you have any issue or a complaint against an insurer, the first step is to inform the respective insurance company’s grievance redressal cell. All life and general insurance companies provide details contact personnel (phone number and email address) on their website and the policy document. You can reach out to insurers through their digital platforms as well. With offices/branches of insurers temporarily were closed or working at minimum capacity, post pandemic , insurance companies have taken initiatives to encourage policyholders to access their services through digital touch points such as WhatsApp, mobile apps, chatbots and e-mails.

Alternatively, you can directly connect with the insurer and raise a complaint by calling the toll-free number provided on the website and in the policy document.

Insurers update you on the status of the complaint through SMS or email.

Time limit

The insurer should acknowledge the complaint within three days and provide a solution within 15 days or as per the time limit set by the insurance regulator, IRDAI. The regulator has defined the maximum turnaround time (TAT: time taken for completing a task or process) for different services provided by the insurers. For instance, the maximum TAT for life insurers when it comes to settlement of maturity claim or survival benefit or penal interest not paid is 15 days. Similarly, TAT is 30 days for settlement of death claims without investigation requirements and is six months in cases with investigation. You can get the details on TAT from the websites of the respective insurers or IRDAI.

A few insurers such as Digit Insurance provide detailed TAT for each of their services. For premium-related issues, the maximum TAT is 10 days. These issues include premium paid but the receipt not received by the policyholder or premium charged wrongly by the insurer.

If your issue is unresolved at these levels, you can write to the grievance redressal officer of the respective insurer. Again, the contact details (email/phone) will be available in your policy document and on the insurer’s website.

Escalation

If your complaint is still not addressed within the time limit or you are not satisfied with the resolution offered, you can contact IRDAI directly. You can register your complaint in one of the three ways.

First, call the toll free number (details available on the IRDAI website as well on the insurers’ websites). Two, send an e-mail along with the resolution offered by the insurer, if any, along with your policy document or policy number and other relevant supporting documents, if any. Three, you can register your complaint online and keep track of it using Integrated Grievance Management System (IGMS). Alternatively, you can write to the regulator’s grievance cell along with the requisite documents. For this, you need to fill the complaint registration form (available online on IRDAI’s website) and post the same to the Consumer Affairs Department- Grievance Redressal Cell, IRDAI.

Beyond this, you have the right to lodge your complaint with the insurance ombudsman or a consumer/civil court. The details of the insurance ombudsman are available on the respective insurers’ websites and your policy document. You can approach the office nearest to you.

If both parties agree for mediation, the ombudsman gives a recommendation within one month from the date of complaint. Otherwise, the ombudsman passes judgement within three months from the date of receipt of all requirements from the complainant. Keep in mind that you must approach the ombudsman within a month from the date of sending a written complaint to the insurer (to which there is no reply) or within one year from rejection by the insurer.

However, before you escalate the matter with IRDAI or the ombudsman, you must first write to your insurer.

Do note that, you don’t have to pay a fee for making a complaint.

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Benefit illustration must in health insurance plans: IRDAI

Banking & Finance

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A clear benefit illustration should be made an integral part of sales literature of health insurance products issued on a floater basis, according to the insurance regulator.

In a circular on benefit illustration in health cover, the Insurance Regulatory and Development Authority of India (IRDAI) has directed insurers to provide benefit illustration to customers in six age groups beginning from 20 or lower age bracket to over and above 66 years.

This should be attached to every health insurance product’s customer information sheet, the regulator said.

The insurers should also provide a customised benefit illustration in a prescribed format to help them make out the difference between different plans.

All insurers must adopt these norms on or before April 1, 2021, the circular said.

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Will Saral Jeevan Bima be a good term insurance option for you?

Personal Finance

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In a bid to make the process of purchasing health insurance simpler, the insurance regulator IRDAI introduced a standard health insurance product — Arogya Sanjeevani.

Following this, the regulator also recently provided guidelines for standardisation in the life insurance space, through a standard term life product — Saral Jeevan Bima. All insurers are to launch the product by January 1, 2021. The launch of Saral Jeevan Bima ensures purchase of a term plan is made simple and easy.

About the policy

Saral Jeevan Bima policy is a standard term life cover as per IRDAI requirements.

It is a pure-vanilla term cover which pays the sum assured (SA) in lump-sum to the nominee in case of death of the policyholder during the policy term.

This policy is offered only to individuals aged between 18 and 65 years for a minimum policy term of five years (maximum of 40 years). The plan offers a minimum SA of ₹50,000 and a maximum of ₹25 lakh, in multiples of ₹50,000. However, insurers have the option of offering a higher SA (over ₹25 lakh), too.

We recently covered the details of the product extensively in another article, ‘All you need to know about Saral Jeevan Bima’. Here, we highlight whether or not should you opt for this policy.

Take note

There are three important points to note before you go for Saral Jeevan Bima.

One, it is the most basic term plan which provides level term cover — the premium payment and the life cover you choose remain constant for the policy term.

On the other hand, most policies in the market offer different options for SA.

For instance, LIC’s Tech Term plan gives you the option to choose between a level SA and an increasing SA.

Two, this standard plan offers lump-sum pay-outs to the nominee only upon the death of the policyholder.

But most plans in the market offer staggered pay-out options with an increase in pay-out at a certain percentage every year.

Some policies offer return of premium paid if the policyholder survives maturity.

And lastly, most term plans in the market offer accidental death benefit, partial and permanent disability benefit, and terminal and critical illness riders, in addition to death benefit. Some policies have riders built into them. For instance, SBI Life’s eShield comes with terminal illness cover built into the policy, and offers accidental death and accidental total and permanent disability as riders.

In the case of a standard term plan, only two riders can be offered — accidental death benefit and permanent disability benefit. Even then, it is at the discretion of the insurers.

The ₹25-lakh cover may not be sufficient for everyone. When it comes to term plans, experts generally recommend having a term policy with a death benefit at least 10-20 times your gross yearly income.

You should also consider your personal financial position (your liabilities) to decide your SA, as it will help if your dependants can comfortably settle your outstanding liabilities, if any, in your absence.

While insurers have the option of offering higher SAs on this standard policy, we need to wait and watch as to how many will do so.

Otherwise, with Saral Jeevan Bima, since terms and conditions and pay-outs are the same across insurers, you can select the insurer based on the premium, services offered as well as their claim settlement track record.

To give you an idea, the premium for existing term plans for ₹25 lakh (30-year-old male for 70-year policy term) works out to ₹3,500-8,500 across insurers.

It would work to the benefit of the policyholders if this policy is available through digital platforms as online plans tend to be cheaper.

Currently, the minimum SA of many insurers are higher than that of Saral Jeevan Bima — ₹50 lakh for LIC’s online term plan Tech-Term, and ₹35 lakh for SBI Life’s eShield (if purshased online). If Saral Jeevan Bima is available online, it can come in handy for those looking for a cover for ₹5-25 lakh.

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How wellness features make your health insurance better

Personal Finance

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Insurance regulator IRDAI has issued guidelines on wellness and preventive features offered in a health insurance policy.

While many insurers already offer wellness benefits to policyholders, the guidelines not only widen the scope of such features but also standardise them.

The Insurance Regulatory and Development Authority of India (IRDAI) has allowed insurers to offer this feature as an optional or an add-on cover or as a rider.

Here is what you, as a policyholder, should know about wellness features and their benefits.

What’s on offer?

Many insurers, including ICICI Lombard, ManipalCigna, Bajaj Allianz and Max Bupa, offer health policies with wellness features that reward the policyholders for maintaining a healthy lifestyle.

Rewards are offered, provided policyholders undertake the wellness programme specified by insurers. The rewards are in the form of points which get accumulated on completion of a task, say walking 10,000 steps in a day or running 3 km a day.

So, if you have accomplished the goal, you can redeem your reward points against outpatient consultation (OPD), pharmaceutical expenses, diagnostic services and health check-ups through the network providers of the insurer (reimbursement allowed if cashless claim is not available).

Take ICICI Lombard’s iHealth Plus policy for example. You can earn 100 points if you quit smoking.

You can also earn up to 1,000 points if you undergo medical check-up. You can redeem these points against OPD, dental expenses etc.

Similarly, in the case of Aditya Birla health plan, you can earn health returns (reward points) through accumulation of ‘Active Dayz’. If you burn 300 calories in a day, you earn one Active day.

With Bajaj Allianz General, you can redeem the accumulated points for co-pay waiver at the time of claim or increase in sum insured in case of no claim.

Note that the rewards system varies with insurers. For instance, in the case of iHealth Plus policy, the maximum points an individual can get is 5,000 and each point is equivalent to 25 paise. It can be carried forward up to three years. In the case of ManipalCigna’s ProHealth policy, the maximum reward that can be earned is 20 per cent of the premium paid and each point is valued at ₹ 1.

The points are monitored by health insurance companies on real-time basis through mobile apps or wearables such as Fitbit that track your activity.

As per IRDAI’s guidelines, in addition to the existing wellness benefits, insurers can also include redeemable vouchers to obtain protein supplements and other consumable health boosters, or for membership in gym/yoga centres.

Sweetie Salve, Vertical Head, Claim Medical Management, Bajaj Allianz General Insurance, says: “Redeemable vouchers, could typically have two approaches — where insurers proactively give these vouchers to policyholders on a complimentary basis, where it is offered to initiate a healthy lifestyle and create a sense of responsibility for maintaining good health, or policyholders may have to earn them based on certain wellness criteria.”

The regulator has also allowed insurers to offer discounts on premium and/or increase in sum insured based on the wellness regime.

As insurers are yet to file revised versions/new products with the regulator, it may take a while before the products are updated for the additional benefits. Despite the improved benefits, policyholders may not see a significant increase in premium.

Win-win

Amit Chhabra, Head, Health Insurance, Policybazaar.com, says: “While there could be some costs involved in offering wellness services, it would subsidise the claim cost for insurers as healthy customers would claim less.”

However, Priya Deshmukh-Gilbile, Chief Operating Officer, ManipalCigna Health Insurance, says: “The recent guidelines on wellness benefits have put in motion reward-linked wellness features for healthy living, and industry products incorporating discount and reward options might see some impact on premium.”

To enrol in wellness programmes, policyholders should purchase products that offer such benefits. All wellness benefits are offered through digital mode, through respective insurers’ mobile app. For instance, Max Bupa’s Health is an app that manages policyholders’ fitness data and health score.

Once downloaded and registered, you can sync your wearables such as Google Fit, Apple Watch or Fitbit with the mobile app; alternatively, the said app itself will track your fitness activity.

On the other hand, if you have enrolled yourself in a gym or yoga centre, where your fitness activities are done, you will still earn reward points for that as well.

iHealth Plus policy offers 2,500 points for a gym/yoga membership per year.

But do keep in mind that your policy selection should be based oncoverageand not just on wellness programmes and their benefits.

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