Page 23 - The Insurance Times August 2025

2.7 The Stakeholders' View protection, reinsurance, solvency, and capital adequacy. These
Policyholders consistently express frustration over fine- systemic protections may be jeopardised if health is divided.
print exclusions, delays in pre-authorisation, and cashless
claim denials. 4. Conclusion
India's health insurance sector is a cornerstone of its journey
Insurers argue that they face moral hazard, fraud, and toward Universal Health Coverage and financial risk
adverse selection risks, which a more potent health- protection. However, its current governance under a
specific regulator could help manage through better generalised insurance regulator may be insufficient to
data integration and treatment guidelines.
address the sector's unique, complex challenges.
Hospitals complain of receiving late reimbursements,
facing aggressive claim rejections, and encountering While setting up a brand-new health insurance regulator
opaque package pricing, which leads to strained may sound attractive, it comes with significant
relationships with insurers. administrative and legislative burdens, as well as risks of
fragmentation. Instead, creating a dedicated, quasi-
Public health authorities are concerned that private autonomous Health Insurance Authority within IRDAI can
health insurance might duplicate or crowd out essential achieve a balance, providing the sector with the attention
public health programs if coordination is weak.
it needs without compromising systemic coherence.
A dedicated regulator or a specialised division could address Instead of creating a brand-new organisation, the IRDAI
these concerns in a holistic framework. could establish a strong Health Insurance Authority with
distinct budgets, personnel, and reporting lines, led by a
3. Possible demerits of having a Separate senior executive with expertise in healthcare administration.

Health Regulator It should have a strong grievance redressal team with
medically qualified staff. The authority should be equipped
3.1. Regulatory Fragmentation
with specialised fraud analytics and AI tools, along with a
In addition to general insurance lines, such as auto and strong Health Insurance Ombudsman that has greater
travel, many insurers also offer health products. The same autonomy and quicker timelines.
company may face conflicting compliance burdens,
coordination issues, and dual reporting requirements if a India is at a crucial juncture, with Ayushman Bharat, the
separate health regulator is established. National Health Stack, and a booming private sector. The
time is right to build a forward-looking, robust, specialised
For example, a general travel insurance policy and a hospital regulatory framework that protects consumers, ensures fair
cash plan (health) offered by the same insurer may be play among providers, and supports public health objectives
subject to two separate regulators, resulting in increased in an equitable, transparent, and resilient health insurance
inefficiencies. ecosystem. This approach would maintain regulatory
coherence while providing the industry-specific focus that
3.2. IRDAI's Ongoing Reforms the health insurance market sorely lacks.
IRDAI has already tightened TPA oversight, introduced
standardised products like Arogya Sanjeevani, and 5. References
established a Health Insurance Consultative Committee with https://abdm.gov.in/
specialised experts. A new regulator might halt these https://bfsi.economictimes.indiatimes.com/news/
continuous advancements. insurance/insurance-frauds-cost-6-bln-annually-
insurers-lose-10-of-premiums/97977190
3.3. Administrative Overheads https://health.economictimes.indiatimes.com/news/
New laws, new funding, inter-agency MOUs, and hiring insurance/health-insurers-disallowed-claims-worth-rs-
personnel would all be necessary to establish a new 15100-crore-during-fy24/116802505
regulator. There may be a regulatory vacuum while this https://www.insurancegermany.com/statutory-health-
takes years to become operational. insurance/
www.irdai.gov.in
3.4. Loss of Synergy Health Insurance Frauds in India: Types, Consequences,
The insurance sector in India gains from integrated and How to Avoid Them. https://www.policyx.com/health-
supervision, which facilitates the coordination of consumer insurance/articles/health-insurance-frauds-in-india/.

The Insurance Times August 2025 21