IRDAI Flags Lapses in Health Insurance Claims, Set to Issue Notices to 8 Insurers

In a significant move to improve claims transparency, the Insurance Regulatory and Development Authority of India (IRDAI) is set to issue show-cause notices to eight listed insurance companies over alleged irregularities in their health insurance portfolios, sparking concerns across the industry.

Insurers Under Scrutiny

As per reports, the names of eight companies are:

 1. Niva Bupa Health Insurance

 2. Star Health and Allied Insurance

 3. Care Health Insurance

 4. Manipal Cigna Insurance

 5. New India Assurance

 6. Tata AIG General Insurance

 7. ICICI Lombard General Insurance

 8. HDFC ERGO General Insurance

Why the Notice Was Issued

IRDAI issued a Health Insurance Master Circular in May 2024 to improve transparency and strengthen the claim handling process. It laid down strict norms for cashless approvals, customer disclosures, and timelines for claim settlement.

On June 26 this year, IRDAI began inspecting insurance companies to assess the implementation of the circular. During the checks, regulators flagged several lapses in healthcare claims practices, raising serious concerns about compliance gaps.

Concerns Flagged During Inspection

• Overly complex information sheets that confuse customers

• Absence of required Product Committee members in claim reviews

• Delays in submitting claims data

Other violations include unnecessary deductions from claim payouts, delays in claim settlement, and rejections without proper reasons.

Response by Insurance Companies

Both ICICI Lombard and New India Assurance have responded to the inspection, whereas others are yet to do so.

ICICI Lombard told CNBC TV18,

Meanwhile, New India Assurance also said that the company has fully adopted the Master Circular, adding that IRDAI has full authority to inspect companies to improve operations.

What’s Next

IRDAI is expected to conduct a board meeting in the upcoming week to discuss issuing show-cause notices to the companies. If found non-compliant, the insurers could face urgent regulatory action to protect customers and maintain industry integrity.

Why It Matters

With health insurance often being a complicated process, delays or claim rejections without clear reasons can cause major issues for customers. IRDAI’s move is expected to improve transparency and ensure regulatory standards are followed across insurers. It could also help bring more accountability in how insurers handle claims.

(Rh/Pooja Bansal/MSM/SE)