Page 21 - The Insurance Times August 2025

Health Insurance

Does India Need a

Dedicated Health

Insurance Regulator?

An Analytical

Om Prakash Prasad
Perspective General Insurance
Senior Manager

Corporation of India

Health claims are one of the most disputed types of insurance in India. Policyholders often struggle
with fine print exclusions, pre-existing condition clauses, sub-limits, and "reasonable and customary
charges" that are unclear and difficult to understand.

Abstract 1. Introduction
India's rapidly expanding health insurance sector faces India's health insurance sector has experienced exponential
distinct challenges that go beyond traditional insurance growth over the past two decades, driven by rising incomes,
lines, including high information asymmetry, complex increasing healthcare costs, and a growing recognition of the
stakeholder dynamics, and integration with public health importance of financial risk protection. However, with this
initiatives. While the Insurance Regulatory and growth has come complexity. Health insurance is at the
Development Authority of India (IRDAI) has introduced crossroads of the financial system, the delivery of medical
significant reforms, it lacks the focused capacity to address services, public health priorities, and social protection. One
issues such as claim disputes, TPA oversight, health system cannot simply view health insurance as a business, as one can
alignment, and digital health integration. This article with other types of insurance. It must also take into account
moral issues, access, fairness, and the quality of care.
critically examines whether India requires a dedicated health
insurance regulator. It explores the benefits of specialised
These problems necessitate a crucial policy question: Should
regulation, including improved transparency, fraud control,
India establish a separate health insurance regulator,
and stakeholder coordination, while also highlighting
distinct from the Insurance Regulatory and Development
potential drawbacks such as regulatory fragmentation and
Authority of India (IRDAI)?
increased administrative burdens. The article concludes that
instead of creating an entirely new body, India should Currently, the IRDAI is the umbrella authority overseeing
establish a quasi-autonomous Health Insurance Authority life, general, and health insurance. While IRDAI has
within IRDAI. This would preserve regulatory coherence undertaken multiple reforms, including the standardisation
while delivering the sector-specific focus necessary to build of products, TPA regulations, and policy portability, the
a robust, consumer-centric, and equitable health insurance criticism is that a regulator handling motor, fire, travel, and
ecosystem aligned with the goals of Universal Health marine insurance cannot give adequate attention to the
Coverage. unique demands of health insurance.

The Insurance Times August 2025 19