In a revolutionary move, regulators directed companies to offer plans to a wider range of individuals, including those with mental health conditions, special children, transgender people and people infected with HIV and AIDS. It also clarified that insurance companies cannot deny claims after five years.
As part of the overall rationalization of financial products, the new standards will come into effect from October 1, 2024. This ranges from market regulators and instruments, from small savings schemes to mutual funds and insurance. These new rules reflect the government’s commitment to simplify financial processes, improve transparency, and bring about investor-friendly mechanisms.
The government has revised the rules for Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY) and Post Office Savings Scheme. From now on, miners will only be allowed one PPF account, removing the multiple accounts that were previously allowed to exist. If multiple accounts are in operation, additional accounts are considered “irregular.” However, the main account will be treated as the main account and the prevailing interest rate will apply as long as it is within the annual limit. Secondary account balances will be combined and any excess amount will be refunded with 0% interest.
Due to tightened regulations, non-resident Indians (NRIs) who operate PPF accounts without renewing their residency status will no longer be able to earn interest. Similarly, SSY accounts opened by grandparents without proper guardianship will require transfer to a legal guardian or biological parent.
If your health insurance policy was issued before March 2024, there are of course a number of changes that will benefit the policyholder. The Insurance Regulatory and Development Authority of India (IRDAI)’s new regulations have reduced the waiting period for patients with pre-existing conditions to 36 months from the current 48 months. Regulators also removed the upper age limit at which policyholders can purchase health insurance. Therefore, anyone can choose to join a health insurance plan.
In a revolutionary move, regulators directed companies to offer plans to a wider range of individuals, including those with mental health conditions, special children, transgender people and people infected with HIV and AIDS. It also clarified that insurance companies cannot deny claims after five years. Under the new standards, after five years, insurers will no longer be able to contest claims based on non-disclosure or misrepresentation. However, if the insurance company determines fraud, you can dispute the claim even after five years.
Another important development is the ability for policyholders to discontinue health insurance at any time and receive a prorated premium refund. Policyholders can discontinue coverage and receive a partial refund at any time if their insurance company denies their claim request. Additionally, if the insured does not make a claim for a year, they may choose to reduce their renewal premium or increase their premium to make way for meaningful no-claim benefits. Masu.
The regulator also advised insurers and/or third party administrators (TPAs) to collect the necessary documents directly from hospitals and not to require policyholders to resubmit these documents for insurance claims. did. In addition to this rule, insurance companies will establish a Claims Review Committee (CRC) to review claims denied by the insurance company.
IRDAI has also brought some important changes in the life insurance sector. Directed life insurance companies to offer special surrender value (SSV) on traditional endowment insurance so that policyholders who leave the company can ultimately get a higher return. The regulator is asking insurers to now separately list Guaranteed Surrender Value (GSV), SSV and payable surrender value in benefit descriptions.
(The author is the co-founder of the wealth management company Wealocity and can be reached at (email protected))
