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June 2, 2015
A health insurance panel has proposed that increases in health premiums each year be linked to the Consumer Price Index-based (CPI) inflation rate and that any increase should be capped at CPI-plus-3%. .
The committee, constituted to examine the health insurance framework in India, tabled the proposal to the Insurance Regulatory and Development Authority of India (IRDAI), reported Business Standard. It said that any increase higher than the proposed cap should require IRDAI’s approval. According to the committee, the use of discount structures as a risk management tool to incentivise customers to actively manage health may be permitted.
At present, once a health product is launched by a general insurance company, the pricing cannot be changed for the next three years. IRDAI constituted the 11-member committee last December 2014, comprising representatives from private-sector and public-sector life and general insurers, apart from members from IRDAI and the General Insurance Council. The panel was tasked to look into products, distribution, financial matters, M&A and policyholders’ interests in the health insurance arena.