The Insurance Regulatory and Development Authority of India (IRDAI) has mandated that health insurance companies finalise cashless claims within three hours of receiving a discharge request from a hospital.

IRDAI’s directive is part of a comprehensive Master Circular on Health Insurance Products that supersedes 55 previous circulars.

The regulator said: “The Master Circular has brought in one place the entitlements in a health insurance policy available to a policyholder/prospects for their easy reference and also emphasises measures towards providing seamless, faster and hassle-free claims experience to a policyholder procuring health insurance policy and ensuring enhanced service standards across the health insurance sector.”

This new regulation aims to expedite the discharge process for policyholders, ensuring they are not unnecessarily delayed.

Insurers failing to meet the three-hour window will have to bear the cost of additional hospital charges incurred due to the delay.

Companies have until 31 July 2024 to establish the necessary infrastructure to comply with these changes, reported Business Standard.

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In the event of a policyholder’s death during treatment, insurers are now obliged to facilitate the immediate release of the deceased’s remains.

In addition, the decision on cashless authorisation in the event of emergencies must be made within one hour of the request.

The IRDAI is also advocating for a digital pre-authorisation process, which would provisionally approve the claim and acknowledge the commitment to pay upon receipt of the final hospital invoice.

Policyholders who have not filed any claims in the preceding year are eligible for a premium discount or an increased sum insured at renewal, as part of the ‘No Claims Bonus’ (NCB) system.

Previously, the NCB was limited to a cumulative bonus, which only added to the sum insured.

Now, customers have the flexibility to cancel their policies at any point and receive a premium refund for the remaining term.

Insurers are also encouraged to offer a diverse range of products, add-ons, and riders to cater to various demographics and healthcare needs.

IRDAI’s announcement follows the news that LIC is looking to foray into the health insurance sector, potentially through acquisition.