Regulator for health insurance on fast track
of the two people cited above said.
Currently, the entire life and non-life insurance sector is regulated by the Insurance Regulatory and Development Authority of India (IRDAI). The government believes concerted efforts are required to increase insurance penetration and provide affordable health cover for all by 2047. The proposed sectoral watchdog would also address issues such as standardization of treatment costs and fast settlement of claims.
Queries sent to the finance and health ministries remained unanswered.
“The entire chain in the insurance sector including insurance companies, third party administrators and reinsurers is regulated, barring the healthcare service providers. This has resulted in lack of standardization in terms of costs of treatment at hospitals and resultant higher premiums on policies. It is high time a sectoral watchdog is established for healthcare services that could help in addressing issues such as healthcare inflation and bring about positive directions to provide affordable, effective, and efficient products to consumers,” said C.R. Vijayan, former secretary-general of the General Insurance Council.
The Centre will also consult states as part of the process, since health is a state subject and creating a new regulator will require their full cooperation, the second person added.
According to official estimates, about a third of India’s population lacks health cover despite rising healthcare costs, even as existing health policies have high premiums.
Swiss Re estimates India’s overall insurance penetration in FY24 at 3.8% in India and 6.5% globally. Penetration for life insurance in India for the year is projected to be at 2.9%, and for non-life at 1%. Insurance penetration is measured as a percentage of total premiums collected to the country’s gross domestic product (GDP). It is one of the parameters used to assess the level of development of the insurance sector in a country. It is still quite low in India.
CareEdge estimates that the Indian non-life insurance market would grow by approximately 13-15% over the medium term. The health insurance segment has already breached the ₹1 trillion mark.