Guidelines for Implementation of Revised Group Insurance

Purpose of these Revised Group Insurance Guidelines

The main aim of IRDAI to issue these guidelines was to standardize and rationalize the management and administration of group health insurance products. With these revised group insurance guidelines, IRDAI intends to protect the interests of all the parties involved, namely, the employees, the employer or the companies, and the insurer. It also aims in bringing more transparency to the current policies. These guidelines are to be followed by all the insurers providing group medical policies.

Major Guidelines for Implementation of Revised Group Insurance

Some of the highlights of the draft “Guidelines on Group Insurance Products under Health Insurance Business and other Operational Matters” include:

- The minimum size of the group and the maximum policy term should be followed. That is, group medical policy cannot be issued to a group whose size is less than the minimum stipulated size. Also, the policy cannot exceed the maximum stipulated term.

- All the insurance companies should have an approved group insurance underwriting policy by their Board. Also, the policy should mention the risks and costs that are undertaken and factored in while calculating the premium.

- A master policy is to be issued to the group, and a certificate of insurance (CIS) should be issued individually to the insured members of the group.

- Pricing should be done based on comprehensive actuarial principles and other supporting data. This data can include age, gender, size of the group, expenses of the plan, profit margin, termination, etc.

- The master policyholder (employer) and the insurer (insurance company) shall enable the portability or migration of the policy as per the policy rules.

- To obtain cashless service, wherever it is applicable, the beneficiaries (employees) of the policy should be issued with ID cards by mentioning their names

How Will the Standardization of Group Health Insurance Help?

In its draft, IRDAI mentioned that group insurance for employees is one such product that is beneficial for both the formal as well as informal sectors of society. Thus, the revised group insurance guidelines can help:

- Adapt a consumer-centric approach and streamline the complete process

- Make the group medical policy process more transparent

- Building trust amongst all the stakeholders

- Determine a fair price for a group health insurance

- Cater wider range of consumer segments

- Improved underwriting processes through AI-based modelling

- The master policyholder acts as a facilitator for offering the cover and services that also includes claims. The claims should be mentioned in the Terms and Conditions section.

Conclusion

Many times, choosing the right group health coverage can be a challenging task for the employer. Also, the beneficiary’s (employee’s) interest needs to be safeguarded. It is for that purpose, guidelines for the revised group insurance came into force. The draft mentions the responsibility of the master policyholders and at the same time increases transparency and redressal mechanism for the beneficiaries.