Page 211 - Ebook health insurance IC27

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already undergoing treatment, may lose coverage because of the insurer's failure.
New insurers might decline the policy, or exclude certain coverage or might give
them poorer coverage. Finally, even otherwise, health insurance cover becomes
more useful with time , as all the 1 year, 2 years or 4 years exclusions get covered.
If he switches insurer, he might have to start these waiting periods all over again.

Q3. Describe in brief the Regulatory Structure of Health Insurance.
Ans. There are several components of the Regulatory Structure :
(i) Statutory Base - Legal sanctity for regulatory function, an independent financing

source and adequate power of regulator to take penal action are an important
statutory base for the regulator.

(ii) Administrative Location - A health insurance regulator can be housed within
Health Ministry, or in an Insurance Regulatory Agency. In a small country, with
limited regulatorymanpower, orwhen theregulatoris dealing withintegrated insurers
which also have non-health businesses, having a health insurance regulator within
the overall insurance regulatory structure is optional. An independent Health
Insurance Agency outside the health ministry or outside the regulatory mechanism,
for non-health insurance entities is also an option.

(iii) Licensing and Registration - These are the regulator's tools to check the
management background and their integrity, financial strength and business plans
before granting the insurance license to any entity. These aspects are important in
terms of safety of the large public money which the insurers need to manage.

(iv) Financial Regulation -Regulators usually lay down prudent accounting regulations
and rules, financial reporting requirements, and undertake constant monitoring of
the insurance companies to ensure that they stay solvent and their accounting
statements are true and fair.

(v) Product Regulation - Regulators lay down filing or approval requirements for

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