Irdai caps health insurance premium hikes for senior citizens at 10 pc per annum

Insurance regulator Irdai on Thursday directed insurers not to increase health insurance premiums for senior citizens by more than 10 per cent in a year. The Insurance Regulatory and Development Authority of India (Irdai) issued the direction after noting that there has been a steep increase in premium rates under some of the health insurance products offered to senior citizens (age 60 years and above).

In a circular, Irdai has directed all general and health insurers offering indemnity-based individual health insurance products to senior citizens not to “revise the premium for senior citizens by more than 10 per cent per annum”.

Indemnity health insurance plans are mediclaim insurance policies wherein insurance companies pay the actual hospitalisation expenses incurred by the policyholder.

Irdai further said insurers will have to undertake prior consultation with it if the increase proposed in the premium for senior citizens is more than 10 per cent per annum.

The regulator also said that as part of the ongoing monitoring of insurance products, Irdai will continue to keep a close watch on indemnity-based individual health insurance products offered to senior citizens.

The premium rate is primarily based on the estimated claims outgo and the expenses, including acquisition costs incurred by the insurance company for acquiring and servicing the insurance policies. The claim outgo is largely dependent on the amounts charged by the hospitals for various treatments/surgeries.

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