Manasije Mishra, CEO, Max Bupa Health Insurance, speaks to Chandralekha Mukerji about the new standardisation guidelines -
Q. What will the standardisation guidelines mean for customers and the industry?
A. One of the problems with health insurance is that some of the products are complicated. Now, if insurers are allowed to have different definitions, it becomes even more difficult for customers to understand health insurance policies. Standardisation will help clear up some confusion.
As for the industry, standard definitions can quicken the approval process (for a product). Before standardisation, the Insurance Regulatory and Development Authority, or Irda, used to spend a lot of time checking how an insurer defines a term. Standard definitions will save Irda the effort.
Q. Will you have to tweak your products due to the new guidelines?
A. There might be minor adjustments, but our products won't require large-scale changes. However, there are concerns for the industry, which were taken up with Irda. The regulator has responded and there has been constant interaction between chief executives of insurance companies, General Insurance Council members and Irda Chairman TS Vijayan.
Q. Can you elaborate what these concerns are?
A. The main concern is about the transition. There are two deadlines. The first is 30th June, for group products, and the second is 30th September, for retail plans. If an insurer fails to re-file products under the new regulations, there is a chance that the insurer may not be allowed to sell that product after the deadline.
This is a lot of work for the industry (re-filing all policies). Also, there is a concern about whether Irda will be able to approve these products quickly. The products might get stuck at the approval stage.
Q. The standardisation guidelines define 46 common health insurance terms, 11 critical illnesses and procedures, gives a list of permanent exclusions and standardises agreements between TPAs, insurers and hospitals. Do you think this is sufficient or more could have been done?
A. The guidelines are quite comprehensive. The fear in a standardised regime is that it kills innovation. However, while the guidelines have standardised definitions, they have not reduced the scope for innovation or restricted companies from offering more.
For instance, 11 critical illnesses have been defined. This was required as some insurers had definitions that were not easily understood. For example, a doctor can define a heart attack in six different ways, but a customer might not understand such technical differences. Therefore, there was confusion regarding what is covered and what is part of the exclusions. A standard definition will bring parity.
However, the regulator is not stopping insurers from covering additional critical illnesses here. An insurer can always expand the list and differentiate a product.
Q. Apart from comprehensive coverage, what else would differentiate products?
A. Pricing will be one. Insurers are free to price the products as they choose. Also, the terms have been defined now. So, while the definition of waiting period or co-pay will be the same, insurers are free to decide the waiting period term and the loading charge.