IN AN attempt to increase health insurance penetraÂtion, insurance regulator may shortly allow group health insurance for homogÂenous groups without emÂployer-employee relation.
The proposal comes in the wake of both finance minister Palaniappan ChiÂdambaram and sector reguÂlator, Insurance Regulatory and Development Authority (Irda) chairman J Hari Narayan agreed on allowing group health insurance cover for self-help groups, professional associations such as teachers in a school, nurses in a hospital, auto-driver associations or domestic workers.
General insurers feel that if the concept is extended to non-life segment, specially health insurance, it would help increase the penetraÂtion to a large extent.
Finance minister ChiÂdambaram is scheduled to meet with general insurance companies’ chief executives along with the Irda chairÂman in near future where the issue of extending group health insurance to homogÂenous groups is expected to figure prominently.
“Although the agenda for discussion has not been fiÂnalised yet, we feel it would focus heavily on reach of inÂsurance. Moreover, if genÂeral insurers are allowed to come up with products for homogenous groups, havÂing similar risk profile but no employer-employee reÂlation then health insurÂance will reach masses,” said Bhargav Dasgupta, MD and CEO of ICICI Lombard General Insurance.
Last week, a series of reÂforms were announced by finance ministry to revive life as well as non-life inÂsurance sectors. More reÂforms and direction is exÂpected shortly for non-life insurance category.
Generally, group insurÂance products are priced lower than the retail segÂment products and the covÂerage is also better. For inÂstance, the group covers at present being provided to employers for their employÂees covers the members against pre-existing disÂeases, maternity related hos-pitalisations and has low waiting period though same is not the case with most reÂtail health insurance plans.
Pricing is another area where the group insurance holders are enjoying higher benefits, since the risk analysis is based on group, insurers offer discounts. DeÂpending on the size of the orÂganisation and competition, discounts may change.
“The pricing is optiÂmised for group health inÂsurance plans and depends on the overall risk factors of the group, rather than one or two individuals, because of which prices are favourable for the group,” said Rakesh Jain, CEO, ReÂliance General Insurance.
Depending on the reÂquirement of the group optÂing for group coverage, inÂsurance companies offer several options to choose from like sum insured, co-payment options, list of apÂproved hospitals and removÂing certain exclusions.
“Provision of customising the health insurance plan is only available in group cateÂgory and if the group insurÂance is opened to broader market, it will bring signifiÂcant change in health insurÂance penetration,” said Neeraj Basur, CFO, Max Bupa Health Insurance.