IRDAI mandates 30-day free look period and 3-hour hospital discharge policy in new “Master Circular on Health Insurance Business”

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New Delhi: The Insurance Regulatory and Development Authority of India (IRDAI) released a Master Circular on Health Insurance Business. The circular, dated May 29, 2024, takes effect immediately. It offers benefits like a 30-day free look period for policyholders, and mandates a 3-hour time limit for final discharge authorisations for insurers.

Following are some of the the key highlights from the Master Circular:

Customisation and coverage: Insurers are now mandated to offer products catering to all ages, medical conditions, and treatments, including AYUSH. Policyholders hold the agency to customise their policies to meet their specific needs.
Customer information and free look period: Every policy has to be accompanied by a Customer Information Sheet (CIS), which will provide details about its key features and exclusions. Policyholders will have a 30-day free look period where they can review and cancel the policy if they are unsatisfied.
Cancellation and nomination: Policies can be cancelled after providing a 7-day notice, and policyholders can get proportional premium refunds if no claims were made. They can nominate someone to receive the claim payment and change the nominee anytime.
Grace period and renewal: Premium payments are to have a grace period of 15-30 days that will maintain policy benefits. Unless policies have been withdrawn, they can be withdrawn or migrated without the loss of any benefits.
Claims and cashless settlements: Insurers are mandated to aim for 100% cashless claim settlements, and make a decision on the requests within an hour. Final discharge authorisations have to be granted within three hours. The cost of delays has to be covered by insurers. Claims cannot be contested after 60 months of continuous coverage, except in the case of fraud.
Special coverage: Insurers have to offer products for persons with disabilities, HIV/AIDS, and mental illnesses as per relevant laws.
Ayushman Bharat Health Account (ABHA): Insurers can help create ABHA numbers after receiving the consent of the policyholder.
Performance monitoring of TPAs: Insurers have been mandated to monitor Third-Party Administrators (TPAs) to ensure the continuity of service quality and customer satisfaction, with remuneration tied to service discharge. Remuneration to TPAs is to be based on the quality of service, and not claim ratios.