The IRDA is trying to streamline the definitions so that it becomes simpler and process wise everybody has clarity on what the claims etc are. So, number of changes that have come up; one, in terms of definition on deductibles wherein it defines how deductibles is wherein whatever is the amount of a person’s claim there is certain amount which is reduced from it. Therefore, if deductible is Rs 1,000 and claim is Rs 3,000 then he is paid out Rs 2,000. On the other hand if claim is Rs 1,000 then he is not paid anything. It also mentions how a deductible has to be claimed, what will be the amount whether it is annually or on per claim basis.
The second point is of co-payment wherein a certain percentages paid by the policyholder and there also the change that has come about is, any co-payment is excluded from the sum assured.
There is another change in terms of portability; portability is basically where one can move policy from one company to the other. It also allowed moving it between policies of the same company itself. That has been excluded.
There is a definition of hospitals being relaxed and any hospital, which is registered under the Clinical Establishment Act of 2010 is there, couple of changes in terms of maternity, it is expanded a little bit including complicated procedures etc and also today lawful terminations of pregnancies and there is another change which has come in terms new born definition also interestingly allows adopted children.
Therefore, a lot of changes are coming in and definitions are in place. It makes it easier for the customer to understand and also no misuse from the insurance company.