Health Insurance policies should be available in Local Language.

When people buy health insurance policies, companies write terms on paper in such complicated legal language that it becomes difficult to understand. As a result, people do not understand the policy terms properly and face problems during claims.

Insurance Regulatory and Development Authority of India (IRDAI) said details of coverage, waiting period, limits, exclusions, claim filing procedures will be available “in plain language at a snapshot”.

Now, after protests from various quarters, the insurance regulator IRDA has issued an order to the insurance companies and said that they should provide a simple and necessary Customer Information Letter (CIS). The new CIS format will be implemented from January 2024.

According to the report, insurance companies have to ensure that customers can easily understand their policy terms. It is important for the policyholder to understand the terms of the policy purchased, the regulator said in its circular. Since a policy document can be full of legal complexities, it is important to have a document that, in simple terms, describes the basic features of the policy and provides the necessary information.

Complaints to IRDA have increased due to lack of uniformity in information between insurance companies and policyholders. This is why IRDA has issued a new circular.

In a circular to insurers, the regulator said citing allegations of data asymmetry between insurers and policyholders, the existing CSS has been prescribed as a solution to policy documents that may be legal. By fixing the font size, the regulator said the revised CSS should be available in the local language if policyholders so desire. It also advised insurers, intermediaries and agents to get policyholder recognition on the seat.

The circular comes after the regulator set up a 12-member committee to simplify insurance policy terms. Policyholder’s obligation to make transparent and impartial disclosure of relevant health information, as non-disclosure may affect claim settlement.

Insurers require the signature of the policyholder stating that they have noted and accepted the details of the CSS. IRDAI said in a notification that the revised CSS is expected to lead to more informed policyholders, reduce disputes and delays and create a safer health insurance experience for policyholders.