Following a Supreme Court order, the insurance regulator IRDAI has introduced series of health insurance and motor insurance reforms and has asked all general insurance companies to offer guaranteed renewal health insura

The Supreme Court has been intervening as far as the insurance industry is concerned to uphold the interests of the policyholders. Following the directions, the Insurance Regulator Insurance Regulatory and Development Authority of India (IRDAI) has introduced series of health insurance and motor insurance reforms and has asked all general insurance companies to offer guaranteed renewal health insurance and long-term third-party motor insurance covers which recently came into effect from 1st September, 2018. To promote the healthy growth of the sector on the whole. Health insurance products have complex policy conditions and usually it is difficult for a customer to appreciate benefits available. It is difficult for customers to compare product offerings from different companies. Standard terms and conditions help in comparisons and clarify things so that customers know exactly what the terms are so overall thee is less room for confusion. The steps proposed by the regulator are likely to make it easier for customers to compare product offerings by different companies. Waiver of waiting period: It is attractive to policyholders and gives them the assurance of full cover from day one of purchase. Health products with waiting period may not appeal to the prospective policyholder as they may not like the idea of paying premiums with no entitlement to benefits during the initial period. Covering pre-existing illness after a period of 3 years: This would give assurance to a section of population who are currently suffering from life style diseases like diabetes, blood pressure etc. to get some level of cover for complications arising out of pre-existing illness at some point of time in future. Both these proposals seem to give natural terms i.e. what customers would expect. They may also reduce hassles at the claims stage as there will be fewer conditions to check. Long term Motor policies: On the other hand in the motor insurance reforms, the companies have introduced long term policies, as Indians have a regular habit of either delaying in renewal or non-renewal of policies. The impact on premium outflow will be more in the first year. Instead of making annual premium payments, the TP premium will have to be paid as an upfront-lump sum payment. Saying that the premium has increased by a certain multiple may not be the right way. The third-party premium i.e. the tariff is fixed by IRDAI. In the new rule, only the outflow has increased in the first year, while no premium is to be paid in 2nd and 3rd year. As we see below, the tariff has also increased for certain categories.