Sharp Discounts in Group Health Insurance are on the Way

Group health insurance covers pre-existing diseases from day one so this cover is attractive for both the employer and the insurer. It brings a large number of employees for insurance company under its cover in one go

Insurance companies generally cross-subsidise group health insurance as they get other businesses too like property and fire insurance from corporate.

Individual health insurance is a profitable segment for most of the insurance companies and the premium rates have also been raising over the last three years.

According to the chairman of the Insurance Regulatory and Development Authority (IRDA), TS Vijayan, many complaints had been received on the unfair discounts given to the group insurance policies. Therefore, they wanted to ensure that there are no distortions in the paid premiums for group and individual policies.

The IRDA has asked for details on the pricing structure of these policies from insurance companies through the General Insurance Council. A meeting with all non-life insurers is planned on May 16 to address the issue.

This move of the regulator will ensure that general insurers hike prices in the group health insurance segment according to a senior official at a private general insurance company.

Public interest litigation has been filed by an activist, Gaurang Damani in the Bombay High Court seeking transparency in health sector. Gaurang said that general insurers in order to retain the accounts give priority to group health insurance customers and at the retail level, individual customers are not in a position to take on the insurer.

With five standalone health insurance companies and 23 general insurance companies, the health sector in India is highly competitive.