Concerned over pricing pressures in life and non-life products in the wake of Covid, the Insurance Regulatory and Development Authority of India (IRDAI) has questioned global reinsurers on rate hikes at this juncture. The insurance regulator has also asked the government for health regulations or some power to regulate hospitals as it is not possible to control health insurance costs without control over hospitals.
The pandemic is making both life and health insurance more expensive. Life insurers have been complaining about back-to-back rate hikes by international reinsurance companies like Munich Re, which control the prices of term insurance. Non-life insurance companies have seen hospitals increase their billing and reject cashless treatment, a mode where insurance companies have more control over pricing.
Speaking at an insurance summit IRDAI member (non-life) T L Alamelu said that, during the pandemic, the health insurance industry has settled 27.5 lakh claims for Rs 25,000 crore, while the life industry has settled death claims of nearly 1.7 lakh amounting to Rs 14,000 crore as claims. Alamelu said that unlike insurers, hospitals can keep increasing tariffs. “As an insurance regulator, we do find it difficult to regulate the health ecosystem.”
Comparing it to having to operate with hands tied behind the back, she said that there have been cases where patients were stuck as hospitals were refusing to accept ‘cashless treatment’ where insurers settle bills directly with insurance companies. “We had to step in and ask the state governments in such cases,” she said. “There should be a regulator for the health sector, or we should be allowed to regulate,” she said.
