Key developments that changed the face of insurance industry in 2021

We have overcome the highs and lows of 2021 and are now celebrating the New Year. After the world stagnated due to the onset of COVID-19, the rules and regulations appropriate for the pandemic-infested world are constantly changing. The wave of COVID in the past has caused a lot of uncertainty, and the insurance industry is working with these regulations to help combat these uncertainties. These developments have also largely defined the growth direction of the insurance industry. Recognizing the challenges COVID-19 poses to the industry, IRDAI has redefined the guidelines to make them more familiar.

In 2020, we saw some very important changes that dominated the industry, followed by 2021, especially in the health insurance segment. These regulations not only focus on the overall welfare and protection of the insured, but also take into account the technological and digital advances in policy.

This is a brief summary of everything you need to know about the evolutionary developments in the insurance industry in 2021.

IRDAI encourages non-life insurers to offer home care coverage

After COVID hit the world, home or home care has, of course, become a major part of insurance planning. This need is further accelerated by the severe bed shortage seen in the second wave. Home treatment occurs when the patient is being treated at home and the patient needs to be hospitalized, such as a practitioner. This may be due to a lack of beds or comorbidity in the patient.

Insurance regulators have incorporated the need for home care coverage into their latest guidelines. Regulators are encouraging non-life insurers to offer home or home care as new or additional coverage for existing insurance policies. You can add cover to your existing policy by claiming additional premiums for the rest of the period.

Scope of telemedicine

COVID has brought about an era of social distance and limited mobility to minimize the risk of exposure. It welcomed telemedicine or online consultation as a reliable alternative to hospital visits, at least for front-line defense. Telemedicine has helped not only the initial diagnosis of COVID patients, but also people with other illnesses. IRDAI has taken a positive step in this direction by covering telemedicine charges along with the OPD coverage of health insurance contracts.

Paperless health insurance processing and extension of issuance deadline

Given the ongoing COVID situation, digital push seems to be strong again this year. IRDAI has allowed health and non-life insurers to continue to issue health insurance in electronic form until March 31, 2022, without claiming a physically signed proposal. Insurance regulators allowed insurers to obtain policyholder consent digitally last September. Initially, the exemption for hard copies of signatures was valid until March 31, 2021. In addition, following the second COVID wave, IRDAI extended its signature until September 30, 2021.

This expansion would be of great benefit if the blockade restrictions were re-imposed, as the new Omicron variants are causing third wave concerns. The digital initiative was launched primarily to provide consumers with an alternative option for purchasing policies during a pandemic, but now there is a strong demand for this to be a permanent option.

Standard insurance product with the most common features

IRDAI takes into account the need for standard insurance products with several unified features to meet the diverse needs of different consumers. Travel insurance and accident insurance are also part of this guideline.

As COVID has emphasized the need for travel insurance more than ever, IRDAI has issued guidelines for standard domestic travel insurance products. Known as Bharat Yatra Suraksha, this product had to be offered by general and health insurance companies from 1st July. This product offers five plans that offer both benefits and compensation based on compensation. There is a single premium payment that is pre-collected. It provides coverage for hospitalization for accidents with insurance amounts ranging from 1 to 10 rupees and coverage for deaths from accidents ranging from 1 to 1 rupees. Optional riders can also be attached to the policy. If provided as family coverage, the insurance amount selected shall be applied individually to each family member.

Similarly, health and general insurance companies were required to offer personal accident insurance products after April 1st. It has essential features such as 100% of the insurance amount paid in case of accidental death or permanent disability within 12 months. There are guidelines on the total amount of insurance paid in case of partial disability. There is an optional cover that can be added to this for temporary disability, hospitalization costs, and education grants.

Apart from this, there are other standard products offered in the retail category, such as Bharat Griha Raksha, Bharat Sookshma Udyam Suraksha, Bharat Laghu Udyam Suraksha, as insurance for residential and commercial space insurance against various dangers.

General insurance company rules for product design and pricing

IRDAI has drafted guidelines aimed at providing a framework for insurers to follow regarding product design and pricing. Regulators say that when it comes to product development, products need to be designed to ensure the interests and affordability of policyholders. At the same time, we need to address evolving needs while covering risks accordingly. Regulators classify non-life insurance products into retail and commercial insurance products based on who buys the product and / or the amount of insurance.

According to regulators, feasibility is an important factor to consider when pricing a product. The insurer states that risk exposure, claim experience, costs, reinsurance, solvency requirements, and reasonable surpluses need to be taken into account. Even add-ons need to be priced in a way that the product and add-ons are viable.

Regulators say that major risks should be insured by insurers at the same rate as reinsurers. However, the insurer may charge an additional premium commensurate with the additional risk compensation offered for the fees secured from the international market. Also, you are not allowed to purchase add-ons as a stand-alone product or as a separate insurance policy, regardless of the purchase of other products. Also, the total premium under the cover of all add-ons and options built into the base product should not exceed 100 percent of the premium of the base product. “Authorities may modify less than 100% of the base product premium for certain products,” IRDAI said.

IRDAI Allows More Health Products Under Use And File Procedures

IRDAI allows general and health insurance companies to launch four additional categories of individual products, add-ons, and health insurance riders based on usage and file procedures. These four new categories are personal accident insurance, international travel insurance, domestic travel insurance, and benefit-based health insurance products.

Under usage and file standards, insurers are permitted to sell certain products under certain conditions without the prior approval of IRDAI. “For personal accidents, the” use and file “of domestic and international travel products is subject to accidents and / or related travel, with coverage provided by both the base cover and add-on cover or the rider. Is only allowed to. IRDAI said in the release. These new standards apply to products submitted after April 1, 2021.

(By Amit Chhabra, Head-Health Insurance, Policybazaar.com)