Great news for health insurance customers! Now, insurance companies must give approval within one hour for cashless authorization requests from policyholders.
The insurance regulator, IRDAI, has issued a new guideline to speed up the process.
The recent master circular from IRDAI clears up many issues related to this matter.
Issued on May 29, this circular cancels 55 previous ones.
What’s Changing?
Typically, insurance companies approve a certain amount immediately upon receiving a cashless request from the hospital. The final settlement happens during discharge, when the insurance company gets the bill and other necessary documents from the hospital.
Currently, this process relies on the policies approved by the insurance company’s board, which can be time-consuming.
Key Points from IRDAI Circular
IRDAI mandates that insurance companies approve the final cashless authorization within three hours of receiving the bill at discharge.
The circular emphasizes that if this authorization takes longer than three hours, any additional amount will be covered by the insurance company’s funds.
Moreover, in case of the policyholder’s demise during treatment, the insurance company must allow the hospital to release the body to the family immediately.
Insurance companies need to be fully compliant with these new rules by July 31.
More Choices for Policyholders
IRDAI also requires insurance companies to offer two options to policyholders regarding increasing the sum insured amount.
Policyholders can choose to increase the sum insured or opt for a premium discount on renewal. This move aims to assist those struggling with high premiums due to the impact of Covid.
Flexible Policy Management
Policyholders now have the flexibility to cancel their health insurance policies at any time, provided they give a seven-day notice to the insurance company. This particularly benefits those with one-year policies.
Upon cancellation, the insurance company will refund the premium amount for the remaining period to the policyholder.
Renewal Options for Recalled Products
In situations where insurance companies withdraw or replace policies with new products, especially affecting policyholders or senior citizens covered under old policies,
IRDAI mandates that policyholders be given an opportunity to renew their policies if the renewal period falls within the 90-day withdrawal period of the product.
Strict Enforcement for Ombudsman’s Orders
Insurance companies must now comply with orders from the insurance ombudsman within 30 days. Failure to do so results in penalties, including an interest rate 2% higher than the prevailing rate on the payment amount.
Additionally, IRDAI stipulates that failure to comply with the ombudsman’s orders will result in a penalty of Rs 5,000 per day payable to the policyholder.
