Initiatives that will change the Insurance landscape
Recently, the Insurance Regulatory and Development Authority of India (IRDAI) and the National Health Authority (NHA) introduced several initiatives to streamline the health Insurance sector. Through strategic initiatives, IRDAI aims to revolutionize the Insurance landscape, enhancing accessibility, innovation, and customer-centricity.
The key Initiatives by IRDAI & NHA simplify the process of establishing efficient Insurance businesses.
Some of these key initiatives include
- Health Claims Settlement Timelines: Insurers must approve cashless health Insurance claims within one hour and finalize hospital discharge authorizations within three hours.
- Grace Period for Policy Renewals: A one-month grace period ensures continuous health coverage and protects policyholders from losing benefits if they miss renewal deadlines.
- Cybersecurity Guidelines: Comprehensive cybersecurity measures have been mandated to protect sensitive health and personal data of policyholders.
- Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY): PM-JAY offers up to ₹5 lakh per family per year for hospitalization, significantly increasing healthcare access for the economically disadvantaged.
- Health Benefit Packages (HBPs): The NHA updates PM-JAY’s Health Benefit Packages to cover essential medical procedures, providing comprehensive healthcare services to beneficiaries.
Multiple Insurance licenses and tailored Insurance offerings are being facilitated to meet specific customer needs such as efficient grievance redressal. Actuaries are being appointed to align with market dynamics, and adherence to solvency norms is boosting innovation, competition, and Insurance efficiency, enhancing customer experience and satisfaction.
Vision 2047 & Viksit Bharat
Vision 2047, established by the Government of India, encapsulates India’s goal to evolve into a developed nation by its 100th year of independence, focusing on economic growth, social progress, and technological advancements. Viksit Bharat, translating to “Developed India,” represents collective efforts to improve infrastructure, education, healthcare, and overall well-being. This vision aims to create a robust and prosperous nation, aligning with the broader goals of Vision 2047.
The unprecedented move to release a master circular to make Insurance far more accessible, innovative, and customer-centric comes at the perfect time that syncs with Vision ‘Insurance for All’ 2047.
The Game-changing Master Circular from IRDAI
The overarching goal is to facilitate smoother business operations while safeguarding the interests of policyholders.
To achieve this, IRDAI sought recommendations from Insurance Councils through the Regulations Review Committee (RRC). These recommendations have been thoroughly examined, leading to the formulation of the IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024, a new strategy was deemed necessary to achieve this goal.
The proposed regulations encompass various sectors, each with distinct considerations and objectives.
In the Rural Sector, the measurement unit will now be the gram panchayat, and the obligations for Insurers will be determined based on the number of lives, dwellings, and vehicles covered. Life Insurers will be mandated to cover a minimum of 30% of lives in each gram panchayat, gradually increasing over time. Similarly, General Insurers and Specialized Agriculture and Health Insurers (SAHI) will have obligations pertaining to dwellings, vehicles, and lives, with targets escalating over a three-year period.
Moving to the Social Sector, the focus remains on extending Insurance coverage to marginalized communities. Insurers are required to cover a specified percentage of lives, and the scope has been expanded to include government social security schemes and policies targeting beneficiaries of various welfare programs. Micro Insurance policies and those sold through intermediaries such as Bima Vaahaks are also included in fulfilling social sector obligations.
Addressing Motor Third Party Obligations is crucial given the high proportion of unInsured vehicles, particularly in goods and passenger-carrying categories. Insurers are mandated to underwrite a minimum increase of 20% in coverage over the previous year, with specific targets for new entrants. Renewal of existing policies and coverage of previously unInsured vehicles contribute towards fulfilling these obligations.
To provide flexibility in meeting obligations, Insurers have the option to buy and sell obligations, up to a 20% limit, from their surplus. However, the insurer initially responsible for the policy remains accountable for servicing and claims settlement.
These regulations signify a shift towards a more inclusive and accountable Insurance framework. By delineating clear obligations for Insurers across rural, social, and motor sectors, the IRDAI aims to enhance accessibility and ensure adequate coverage for all segments of society. Additionally, provisions for flexibility recognize the diverse operating environments of Insurers while upholding the overarching goal of consumer protection. Through this holistic approach, the IRDAI endeavors to foster a robust and responsive Insurance ecosystem that aligns with the evolving needs of the Indian populace.
The forthcoming Bima Trinity – Bima Sugam, Bima Vistar, Bima Vaahaks – in collaboration with General and Life Insurance firms, aims to carry a larger weight in this vision.
Bima Sugam facilitates policy purchases, Bima Vistar offers bundled policies, and Bima Vaahaks educate women about Insurance benefits, complementing the increased life Insurance density from USD 11.1 in 2001 to USD 91 in 2021.
Moreover, IRDAI’s initiatives have led to an insurance penetration increase from 3.76% in 2019-20 to 4.20% in 2020-21, with a growth of 11.70%
Although, challenges like low adoption rates, lack of innovation, fraudulence, talent management, and slow digitalization persist, urges for a focus on leveraging technology, aligning with customer behavior, optimizing data usage, simplifying claims management, adopting hybrid distribution models, and tackling fraud.
iNube’s Role in Leading the Insurance Market
Initiatives that benefit both Insurers and the Insured are crucial for fostering healthy competition in the Insurance industry. The adaptation of Insurance technology is equally essential in helping Insurance companies stay competitive and align with this national vision.
Leveraging cutting-edge technology, we at iNube Solutions, an insurance technology provider, offer solutions that streamline operations, enhance customer experiences, and drive innovation in the Insurance sector. Our insurance technology products align seamlessly with IRDAI and NHA’s initiatives, enabling Insurers to offer customized and efficient services whichever niche they belong to.
By adopting iNube’s Insurance Technology solutions, Insurance companies can enhance their market presence, meet regulatory standards, and provide superior service to policyholders, thereby leading the competition in the evolving market.
At iNube, we recognize that the transformative initiatives of IRDAI and NHA, combined with our innovative capabilities of Insurance technology, are driving factors for significant changes in the Insurance sector.
As we advance towards Vision 2047 and a Viksit Bharat, it is safe to say that the future of Insurance in India is at a rising dawn, only getting brighter and promising with every moment. We, alongside our technological advancements, are ready to revolutionize the Insurance industry and contribute to the broader goal of making India a developed nation by 2047.
Curious to know how iNube fits in these initiatives?
Reach out to our Insurance Technology expert’s consultation and find the right solution that suits your niche.
