HEALTH INSURANCE AND REGULATORY ISSUES UNDER IRDA ACT 1999| Rudresh Pratap Singh Roll No. 49 Semester V RMLNLU |
The Insurance Regulatory and Development Authority5
Regulatory issues in the health insurance business5
It should be the duty of the regulator (IRDA) to ensure that the new entrant in the health insurance sector:5
II. Regulations Pertaining To Consumer Protection8
Relationship Between Insurers And Providers9
Is A Health Insurance Policyholder A Consumer?10
III. Regulations Pertaining To The Functioning Of Third Party Administrators10
Recommendations Of The Health Insurance Working Group Constituted By The IRDA12
I am highly indebted to Prof. Gaur for making us understand the complexities of the subject in such an easy and lucid manner. I would also like to thank him for guiding us to make this project of a decent standard. I would also like to thank the staff at the Madhu Limaye library for helping in the search of the relevant material. I would be failing in my duty if I do not thank my friends who have been a constant source of help throughout my stay at RMLNLU.
15th November 2008 Rudresh Pratap Singh
HEALTH INSURANCE AND REGULATORY ISSUES UNDER IRDA ACT 1999
Since neither the Insurance Act, 1938, nor the IRDA Act, 1999 contains any reference whatsoever to the health sector or to the health insurance, health is presumably included under “miscellaneous insurance business”. This non-inclusion and apparent lack of initiative as regards health insurance provisions in Indian government policy documents is reflective of the sanguine view of the functioning of the markets in health care provision and the necessity for health insurance in India. It is probably because of these shortcomings that developing countries like India needs health insurance cover for its large population.
Some of the reasons as to why India might need to go in for more health insurance schemes are as follows:
• It is used to protect the poor from impoverishment due to high medical costs and acts as a safety net for rural and urban enterprises and productive individuals.
• It is used to promote certain behaviour among people e.g. Aarogya Scheme of Andhra Pradesh.
• It generates long-term investible funds for infrastructure building and encourages the saving habit of people.
• It helps in taking away and relieving financial burden from the already strained cash-strapped state public exchequer.
• It serves as an impetus by generating competition and hence leading to provision of better services to consumers.
The Insurance Regulatory and Development Authority
Among the many revolutionary changes that have taken place since the fifty years of independence of India, one of the most noteworthy has been the enactment of the Insurance Regulatory and Development Authority Act, 1999. This legislation was enacted to provide for the establishment of an Authority to protect the interests of the holders of the insurance policies. It was meant to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938; the Life Insurance Corporation Act, 1956; and the General Insurance Business (Nationalisation) Act, 1972. This enactment marked a definitive point in the move towards the privatization of the insurance sector in India. It envisaged the creation of a regulatory authority (IRDA) that would oversee the sector entities in the Indian insurance sector, including health insurance. The assigned powers and functions were meant to enable the Authority to perform the role of an effective watchdog and regulator for the...