Scores of mediclaim holders will have their cashless hospitalisation facility restored, with the insurance regulator IRDA promising to comply with the directive of the Delhi High Court to resume the benefit provided by public sector insurers.
Four public sector general insurers withdrew the facility in top city hospitals on the grounds that they had padded up their bills and were unwilling to accept rates offered by these insurance companies. The Delhi High Court on Tuesday came down against IRDA for its failure to sort out the dispute between insurance companies and city hospitals and directed IRDA to make arrangements to restore the facility.
“Now that the High Court has given direction, we will follow that”, IRDA chairman J Hari Narayan told reporters on the sidelines of a FICCI event here. Mr Narayan, however, maintained that the regulator would come into the picture only if there was a breach of contract between the company and the insurer. He reckons that more products with differential features and varying premiums would help all stakeholders.
Mr Hari Narayan also made it clear that insurers will have to comply with the new norms for unit linked insurance plans from September this year. The new rules, formulated after the IRDA was given the mandate to regulate ULIPs, have raised the risk cover and lowered charges to make the product more attractive to investors.
Life insurers will have to offer a guaranteed return of 4.5% per annum on pension and annuity plans as part of the tighter norms for the sector, a move that is expected to force the industry to slash commissions to agents and invest more in government securities.
Although industry has been lobbying for more flexibility in pension plans, saying that it would erode their proftability. Insurers also reckon that lower commissions will drive down sales. “We do not see any need for change the guidelines that have already been proposed. We will have to balance the profits of insurance companies with what is right and proper”, he said.
Mr Hari Narayan said that insurance companies will have to contain expenses to maintain revenue in the long run. “The insurance companies require to get back to a much reasonable expense pattern for sustainability. We do not want to spin the industry to a high-cost sector”, he said.
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