In a bid to reform the fast growing domestic health insurnace sector, a panel constituted by the insurance regulator IRDAI has recommended a moratorium period of eight years of continuous renewals after which any health insurance claim can’t be questioned based on non-disclosures or misrepresentations at the time of taking the policy.This would mean the policy would be incontestable in terms of application of any exclusions except for proven fraud as well as permanent exclusions specified in a policy contract.


A working group, formed by the IRDAI under its executive director Suresh Mathur, on 24th July, has  reviewed the existing exclusions and recommended a host of measures which may standardise the exclusions in the health insurance policies.

The panel, that has submitted its report on 31st Oct, has said that the industry is expected to grow at a rate of 24-25 per cent for the next 5-6 years and projected to reach Rs 100,000 crores in 2022, said the panel.


The panel has recommended that all health conditions acquired after policy inception, other than those that are not covered under the policy contract (such as Infertility and Maternity) should be covered under the policy and cannot be permanently excluded. Thus, exclusion of diseases contracted after taking the health insurance policy such as for Alzheimer’s disease, Parkinson’s disease, AIDs/HIV infection, Morbid obesity, etc.cannot be permitted, said the panel. 


Some of the other recommendation by the panel are:

– insurers may be allowed to incorporate waiting periods for any specific disease condition(s) to a maximum of four years. Sub limits or annual policy limits for specific diseases / conditions in terms of amount,percentage of sums insured or number of days of hospitalisation/ treatment would be part of the product design, 

-Insurers be allowed to incorporate permanent exclusions with due consent of the proposer which will allow a wider section of the population who have serious pre-existing diseases including persons with disabilities to be insured under health insurance.The permanent exclusion would be specific for conditions which are listed, and this list may be reviewed on a yearly basis by the committee that may be set up by the regulator. 


-However,  these permanent exclusions willl be allowed only in cases where the policyholder may be denied coverage as per the underwriting policy of the Insurer for the diseases disclosed at the point of underwriting,

-There should not be any permanent exclusions in the policy wordings for any specific disease condition(s), whether they are degenerative, physiological, or chronic in nature. 

-Words like “directly or indirectly related”, “such as” shall not be allowed in the exclusions. However, any limits or waiting periods incorporated by the insurers as part of product design have to be  based on objective criteria and sound actuarial principles. Waiting period for conditions namely, Hypertension, Diabetes, Cardiac conditions may not be allowed for more than 30 days,

-Exclusions applied by insurers for alcohol and substance abuse must be reviewed and standardised. This exclusion shall be modified to exclude only treatments for alcoholism and drug or substance abuse unless associated with mental illness,


– Formation of Health Technology Assessment Committee that will examine and recommend the inclusion of advancements in medical technology as well as new treatments / drugs introduced in the Indian market for coverage under Insurance,


– No exclusions” should be permitted for any advancement in technology / advance treatments if they are in the list approved by Health Technology Assessment committee. However, insurers can either incorporate co-payments for such treatments or subject them to the usual, customary and reasonable clause.

-All deaths due to vector borne disease should be classified as death due to disease and cannot be classified as death due to accident.Injuries / death caused by mauling by wild animals, snake bite, scorpion bite or even dog bites can be termed as accidental injuries,


-If the non-disclosed condition is other than from the list of permanent exclusions, then the insurer can incorporate additional waiting period for the maximum period of 4 years for the condition non-disclosed from the date the non-disclosed condition was detected and continue with the policy


According to the panel's report, out of the total health Insurance (excluding persona accident & Travel) business in India, around 58 percent  is controlled by the public-sector companies, 21 per cent the private sector general Insurance companies and 21 per cent by the standalone health insurance companies.In terms of number of lives covered the maximum number that is,74 per cent of the coverage is under Government sponsored schemes, 19 per cent in other group policies and only 7 per cent of the members are covered under individual or retail health insurance. Even the growth under retail health insurance in terms of numbers covered remains sub 10 per cent.


At present ,there are about 27 general Insurers, 24 life insurers and seven standalone health insurer in India. Health insurance is mainly transacted by the general insurers and the health Insurers while life Insurers transact long term benefit policies.