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Health Insurance Premium raised by a lot, remedies available?
21-Jun-2023 (In Insurance Law)
My mother's health insurance company, Religare, raised her premium by 37.5% at one go. Is that legal? Don't they have to more or less stick with the rate they gave you at the beginning? With minor increases for inflation and rising costs maybe.
Personal insurance products ( auto, health. Travel, home, Personal accident, life) sold by the insurance companies classify under pre-underwritten products. This means benefits, coverage and premium pricing is fixed during the product filling stage with IRDAI. Insurers are allowed to increase the pricing under the following reasons:
Product pricing due to regulatory change in third-party premium for auto insurance. Every Auto insurance policy has 2 broad coverage: own damage and third-party cover. Third party cover premium is governed by tariff and regulated. If the regulator decide to increase the premium for this coverage, there will be an increase in premium from all insurers. The regulator will decide in consideration of losses from this coverage to the insurance companies. The current situation of increase in third-party premium effective April01, 2017, is a decision governed by the regulatory body and insurers are mandated for this increase. If the insurance company notices that their product portfolio is not performing well on losses, the insurance company can write to IRDAI and increase the premium. The revised product with new pricing will have to be filled with IRDAI before selling in the market. Any change in the service tax from government will increase the premium.
You can also approach IRDA with your query.
Product pricing due to regulatory change in third-party premium for auto insurance. Every Auto insurance policy has 2 broad coverage: own damage and third-party cover. Third party cover premium is governed by tariff and regulated. If the regulator decide to increase the premium for this coverage, there will be an increase in premium from all insurers. The regulator will decide in consideration of losses from this coverage to the insurance companies. The current situation of increase in third-party premium effective April01, 2017, is a decision governed by the regulatory body and insurers are mandated for this increase. If the insurance company notices that their product portfolio is not performing well on losses, the insurance company can write to IRDAI and increase the premium. The revised product with new pricing will have to be filled with IRDAI before selling in the market. Any change in the service tax from government will increase the premium.
You can also approach IRDA with your query.
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Adv. Siddhant Sharma
Delhi | 500+ Answers
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