'Portability of Health Insurance' now reality

As per Insurance Regulatory and Development Authority (IRDA) latest press release, health insurance policy holders will soon have the choice to switch over from one company to another company under the new portability option. The move is expected to increase quality of services and encourage healthy competition among health insurance provider.

What does ‘Portability of Health Insurance’ mean?
Health Insurance policy holders, who are not satisfied with the services of the present provider, will be able to switch to another service provider at the same premium. This would mean that once an individual is accepted in to a healthcare plan and continues to make the necessary premium payments, he or she would be able to continue obtaining healthcare same services at same premium.

Guidelines of health insurance portability

1. The move stipulates that health insurers should allow policy holders to transfer credit in case of pre-existing illnesses and bonus from one company to another.
2. The guidelines will help policyholders as they don’t have to bear poor service from insurance companies any longer. In the same fashion, health insurers will have to standardise their products and improve their service and efficiency in servicing their customers.
3. Companies will have to constantly improvise their efficiency standards in terms of customer engagement and relationship and ensure that the customers do not move away from them citing service deficiency.
4. Health insurers will have to share entire database including the claim details of the policies, where the policyholders has opted for portability, shall be shared with their counterparts, if requested by the counterpart within seven working days of such request by the counterpart.
5. All applications for the portability shall be acknowledged by the insurers within three working days.
6. In case of switch, old health insurance company will have to share the details of policy in seven days.
7. New system will require strong underwriting and selection process by the companies as there may be some misuse by policyholders.

When this shall be applicable?
This shall be applicable for all existing contracts and new contracts with effect from 1st July 2011.