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The Insurance Times

the products, which include transparency, and fair requirements to take care of
the information asymmetry from the insurer's side.
(vi) Price Regulation - In certain situations, regulators may also regulate the prices
of health insurance products.

Q4. Write a note for need for Regulation of Health Insurance Sector.
Ans. Ensuring enforcement of regulations is the essence of health insurance regulations,

as all regulations and monitoring systems are meaningless without enforcement.
Drafting and promulgation of regulations is not enough, but the power to enforce
them is the key factor in achieving regulatory objectives.

Enforcement begins with careful off-site monitoring supplemented by on-site visits.
Effective action for breaches or violations drive the message home that the regulator
is strict enough to matter, and serves as a deterrent to other breaches in future.

Regulatory actions against violations/breaches can include :
(i) Restricting business activity or activities by the insurers
(ii) Levying fines and penalties on the insurers
(iii) Ordering removal/change of personnel
(iv) Issuing warnings to the insurer and
(v) Appointing Liquidator/Observer/Administrator etc.

Q5. How regulators can monitor the activities of health insurance companies?
Ans. The Regulator monitor the activities of the health insurance companies by two

types of modes :
(a) Off Site monitoring - This is done at the regulator's office itself, without physically

going to the insurance companies. This includes calling for and examining various
documents like

216 Guide for Health Insurance