Health insurance portability from today

If not satisfied with the services of existing health insurer, you can change the company without losing policy benefits as the long-awaited portability comes into force from Saturday.

The health insurance portability facility which was earlier scheduled to become operational from July 1,
however, was postponed because of delay in preparation of software architecture.

"The health insurance portability will come into effect from October 1," DR Kaarthikeyan, director of Star Health Insurance said.

The facility, Damien Marmion, CEO of Max Bupa Health Insurance, said "is expected to bring in new benchmarks in delivery mechanisms and product innovation in the industry".

He further said with the implementation of portability, "the insurers will need to enhance their service capabilities and engage in constant innovation to service their existing and potential customers".

In February, the Insurance Regulatory and Development Authority (IRDA) had issued necessary orders for implementing portability to allow policy holders to switch over to another insurance company with the same terms and conditions.

"The accepting insurer shall provide cover, at least up to the sum assured in the previous insurance policy," the regulator had said.

The new facility will also help those policy holders who stick to one insurer throughout life for fear of losing the cover for Pre-Existing Diseases (PED).

While issuing directions to insurers, Irda had said was essential to protect the policyholders against discontinuity and consequential loss of PED cover by making the health insurance plans portable across the insurance companies.

In general, health insurance policies have specific exclusions for PED for a specified period of cover during the initial year, and policy holders do not get this cover in the event of changing insurance firm. It was considered "detrimental to competition".

Insurance portability comes after Irda received several representations from consumer associations and policyholders for enabling portability of health insurance policies.

Health insurance policy portability will also help people shifting from one part of the country to another. In want of such facility they were put to disadvantage due to lack of their insurers' offices at new locations.

Also, in case of change of jobs, policy holders lose health insurance cover as they could not change their insurer.

Irda had directed insurance companies to mention in the prospectus and sales literature that all health insurance policies were portable.

The request of porting the policy should be completed as per the timelines prescribed in the Irda regulations and guidelines, the regulator had told the insurance companies.

Besides, three standalone health insurers -- Star Health & Allied Insurance, Apollo MUNICH and Max BUPA -- number of other players including National Insurance Company, United India and Oriental Insurance and ICICI Lombard are active in this field.