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Product Filing Guidelines for Health Insurance

Key features : The Product Filing Guidelines set out the procedure and the requisite forms for filing various types of health insurance products, such as, new health insurance products, Pilot Products, Health Package Products and Non-Life Package Products under the File & Use Procedure.Guidelines mandate setting up of a “Product Management Committee” (PMC) by General Insurers and Health Insurers to carry out a due diligence process and record its concurrence on various product related risks for all product filings under File & Use before any application for a product is sent to the IRDAI for approval.A significant change brought about by the Product Filing Guidelines is the introduction of the Use & File procedure for group health insurance products. Per this procedure, a group product may be launched without the prior approval of the IRDAI subject to the following stipulations:The product must be approved by the PMC;The Insurer shall obtain a Unique Identification Number for every insurance product from the IRDAI by duly informing them of the name of the product proposed to be launched; andThe product shall be filed with the IRDAI within seven days from the date of approval by the PMC in the prescribed form.Life Insurers are not permitted to file group health insurance products under the Use & File Procedure and are required to follow the procedure of File & Use as prescribed under the Product Filing Guidelines for these products.In addition, the Product Filing Guidelines provide detailed guidance on Wellness Features and Benefits that an Insurer may offer in a health insurance product. The Product Filing Guidelines also provide an extensive procedure for the withdrawal of products. Withdrawal of a product needs prior IRDA approval and at least 3 months notice, as per Sec 5(ii) of HIR 2016All particulars of any health insurance product of Life Insurers, General Insurers and Health Insurers shall, after introduction, revision or modification be reviewed by the Appointed Actuary at least once a year. If the product is found to be financially unviable, or is deficient the Appointed Actuary may revise the product appropriately and apply for revision under Product Filing Guidelines subject to the provisions of Regulation 10 of these Regulations.Health Insurance Proposal Form : Every Life Insurer, General Insurer and Health Insurer shall devise a proposal form to be submitted by a proposer seeking a health insurance policy. Such form should capture all the information necessary to underwrite a proposal in accordance with the stated Underwriting Policy of the Company.Information collected from the proposal form during the course of solicitation of an insurance policy or issuance of an insurance policy shall not be parted with to any third party, except with the statutory authorities in accordance with the existing statutory laws or in accordance to the instructions issued by the Authority or for the purpose of underwriting the policy of the same individual or claim settlement. No Insurer shall insert any clauses or conditions in the proposal forms, express or implied thereby obligating the prospect to part with the information pertaining to his/her proposal. Notwithstanding the above provisions, all Insurers shall comply with the applicable provisions of the Law, other applicable Regulations as well as Guidelines specified by the Authority while designing the proposal forms.Health Insurance, Rashtriya Swasthiya Bima Yojana (RSBY) : RSBY was launched by the Government in 2007 as a measure of social security to the unorganized workers belonging to below poverty line category in the form of healthcare benefits. Subsequently more categories of people such as NREGES, building and construction workers, domestic workers, beedi workers etc The Scheme provides health insurance cover of Rs. 30000 per annum to a family of five, only hospitalization benefit is covered which can be availed as cashless treatment at empanelled hospitals – both public and private. Premium to be borne by the Central and state Governments in the proportion of 3:1. Central Government to contribute a maximum amount of Rs. 565 per family. Contribution by the State Governments: 25% of the annual premium and any additional premium beyond Rs.750/-. Administrative cost to be borne by State Government. The beneficiary family does not pay any charges except Rs. 30 as registration fee at the time of enrolment into the Scheme.

Product guarantee insurance/efficacy cover

Covers the insured’s legal liability to replace, rework or recover products that have failed to perform their intended function after delivery to a customer. The policy is claims-made with co-insurance as standard, and product recall as an option. The policy may back up the insured’s written guarantee to his customer for a one-off product such as chemical plant or be used to support a guarantee of a company’s products (e.g. wall ties).

Product liability exclusion

Exclusion of liability arising from ‘products’ supplied by the insured. This can appear both in public liability and professional indemnity policies. The risk is insured under a products liability policy. The dividing line between the products and public liability policies is important. In the public liability policy the exclusion does not apply to products still in the insured’s custody and control.

Product Liability Insurance

For the purpose of Product Liability Insurance product means any tangible goods or property after it has left the custody and control of manufacturers which has been designed, specified, formulated, manufactured, constructed, installed, sold, supplied, distributed, treated, serviced, altered or repaired by/or on behalf of the insured.
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UK: Insures legal liability for damages, claimants’ costs and own costs for accidental injury or damage caused by ‘products’ supplied by the insured. The policy is ‘losses-occurring’ with an annual aggregate limit of indemnity. Cover is worldwide in respect of products supplied from the UK. The efficacy risk is not covered but is included under a financial loss extension. The insurer is not liable to replace defective products or for product recall. See RETROSPECTIVE COVER; VENDOR’S INDEMNITY; BATCH CLAUSE; CONSUMER PROTECTION ACT 1987; PRODUCT GUARANTEE.
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US: Protection against financial loss arising out of the legal liability incurred by a manufacturer, merchant, or distributor because of injury or damage resulting from the use of a covered product.

Product Linked Insurance Schemes as a source of Insurance Marketing

Of late, Airlines have tied up with Insurers for offering travel insurance to its customers, LPG Distributors for any loss and/or damage due to LPG connection by its customers, Mobile Manufacturers have tied up with insurers for insuring mobiles being sold against theft/accidental damage, Power Companies tied with insurers for offering risk cover against any accident caused due to short circuit to its subscribers and so on. This is a novel concept whereby manufacturer or distributor of a product tie up with an insurance company for offering certain insurance benefits to its customers. The premium is usually paid by the manufacturer or distributor and insurance is offered as an “Add-On” or the insurance charges at a nominal rate are levied in the Sales invoice.