The Insurance Regulatory and Development Authority of India (IRDAI) has initiated show-cause notices against eight prominent insurers—HDFC Ergo, ICICI Lombard, Star Health, Niva Bupa, Care Health, ManipalCigna, Tata AIG, and New India Assurance—after uncovering serious shortcomings in their health claim processes. These include unjustified claim rejections, unwarranted deductibles, and delayed payments, which violate the 2024 Health Insurance Master Circular
Key Issues Identified
- Delayed settlements: Claims remained unresolved well past the mandated 15-day window
- Improper deductions: Insurers deducted amounts not permissible under the master circular
- Complex procedures: Overly detailed customer information sheets and incomplete portability data triggered compliance flags
IRDAI’s Next Steps
The regulator will review responses from the insurers. If violations persist, IRDAI may impose coercive penalties, demand consumer refunds with interest, or enforce other corrective actions during its upcoming board meeting
Insurers React
- New India Assurance called the inspections routine and said it had already implemented recommended changes—including simplifying forms and enhancing committee representation
- ICICI Lombard affirmed regulatory standards were strictly followed and described the supervision as a phased compliance check
Why It Matters
This regulatory action is part of IRDAI’s broader efforts to protect policyholders and improve service quality. The move coincides with the Finance Ministry urging stricter oversight to enhance grievance redressal amid rising healthcare costs. Ensuring timely, fair settlements is crucial to maintaining trust in health insurance—especially as claims continue to rise, with over ₹1 lakh crore paid out in FY 25 Reuters
What’s Next for Consumers
Policyholders affected by these lapses should:
- Check claim status and follow up with insurers and TPAs
- Escalate unresolved issues via the IRDAI grievance portal (Bima Bharosa)
- File complaints with insurance ombudsman or consumer courts if needed
The Bottom Line
IRDAI’s show-cause notices to eight major insurers highlight serious deficiencies in health claim practices—from delayed settlements to improper deductions. The regulator’s firm response, supported by the Finance Ministry, underscores a commitment to enforcing compliance, safeguarding policyholder rights, and enhancing trust in India’s health insurance ecosystem.
