The Insurance Regulatory and Development Authority of India (IRDAI) on September 04, 2020 has issued a circular suppressing previous guidelines on wellness features or benefits, under the provisions of Section 34(1) of the Insurance Act 1938, read with Regulation 8(d) and 19 of IRDAI (Health Insurance) Regulations 2016.
The Consolidated Guidelines on Product Filing in Health Insurance Business specifying norms on wellness feature are as follows:
• Any wellness and preventive feature shall be designed only with the objective of maintaining and improving good health, thereby enabling affordable health insurance.
• As part of promoting wellness and preventive regime, insurers may offer reward points to those policyholders who comply with or meet the set criteria of wellness and preventive features.
• No Wellness and preventive feature shall be offered without it being filed or incorporated as part of the product in terms of the Product Filing Guidelines. The methodology and criteria to be used for arriving at the reward points and corresponding reward points to be awarded need to be filed.
• Wellness and preventive features under a policy may also be offered either as optional or add-on cover.
• There shall be no discrimination in providing any of the wellness and preventive features offered and in granting the reward points there under to the same or similarly placed categories of policyholders of the underlying health insurance product.
• Every Insurer shall assess the pricing impact of wellness and preventive features offered, if any, and the same shall be disclosed upfront in the File and Use or Use and File application, as may be the case, as specified in the Product Filing Guidelines.
• Discounts on premiums and/or increase in sum insured at the time of renewals based on wellness regime followed by policyholders in the preceding policy period; provided increase in sum insured shall be independent and shall not be linked to the cumulative bonus offered, if any.
• Insurers shall not publish the trade names or trade logos of third party merchandize in any of the insurance advertisements but may refer the services in generic term.
• Insurers shall try to engage multiple service providers for providing benefits / services under wellness and preventive features and the list of service providers may be constantly expanded by the Insurers. Insurers shall not accept any liability towards quality of the services made available by third parties and shall specify upfront that the said third party is responsible for providing the services stipulated under the wellness features and insurer is not liable for any defects or deficiencies on the part of the service provider.
• The operational costs, if any, for administering wellness and preventive features shall be factored into the pricing of the underlying health insurance product and costs factored shall be disclosed in the prospectus or sales literature (invitation to contract) wherever wellness and preventive features are offered.
• Insurers shall clearly specify in the policy contract as to whether the accrued rewards can be carried forward or not when the policy is renewed with the Insurer and the period of validity of the accrued rewards under both the scenarios. In case of expiry of policy, the accrued rewards may be carried forward for a period not exceeding three months.
• The rewards accrued shall be at periodic intervals at rates/amounts declared upfront at the commencement of the policy and shall not be linked to any dynamic factor such as interest rate. The same shall be specified in the Policy Document.
• Insurer shall notify the rewards accrued to the credit of a Policyholder and entitlements of the policyholders under the wellness and preventive features at periodic intervals, at least once in a year.
• Insurer shall specify in the policy contract and prospectus, the mode of communication that the Insurer adopts for notification of various services offered under the wellness and preventive features.
• The Authority reserves the right to reject wellness and preventive features proposed by the insurer if they are against policyholders’ interests and are not in line with fair market conduct notwithstanding the fact that they may broadly meet with the above guidelines.
• The Authority also reserves the right to instruct the insurers to withdraw any wellness and preventive feature which is not in compliance with any regulations or guidelines issued by the Authority or which is found to be prejudicial to the interests of the policyholders or not in line with fair market conduct.
[Circular No. IRDAI/HLT/REG/CIR/233/09/2020]
