October 09, 2010

Health insurance portability coming soon, vows IRDA chief

In a further announcement of the government's presumably good intentions, the head of India's Insurance Regulatory and Development Authority today said that mediclaim policy holders as well as motor insurance policy holders dissatisfied with the services of the respective companies will be able to switch service providers at the same premium.

"It's high time that the insurance industry also moves to offer portability so that the mediclaim and motor insurance policy holders can switch their service provider. We have initiated a debate on the idea of portability and we would be arriving at a conclusion very soon," IRDA chairman J Hari Narayan said at a CII insurance summit in Mumbai.

To a question on whether this portability concept would apply to ULIPs (the troubled unit-linked insurance schemes) also, he said, "Yes and no. Yes in the sense that there has to be a balance in the churn of ULIP's policy and their portfolio has to be evenly managed."

Hari Narayan also said IRDA would soon come out with merger and acquisition norms and is in discussion with Reliance General for the proposed acquisition of a south India based insurance company. "M&A norms would be announced soon. A committee is studying the issue," he said.

Earlier, there were reports that the Anil Dhirubhai Ambani Group-promoted Reliance General Insurance is looking at buying 74 per cent stake in its rival Royal Sundaram. If successful, it would be the first time that a general insurance firm acquires a rival and therefore the relevant guidelines need to be sought from IRDA.

Hari Narayan further said that IPO norms for life insurance companies are expected very shortly from capital market regulator Securities and Exchange Board of India (SEBI).

His pronouncements may mean little on the ground, however. Mobile number portability, promised almost two years back, is still to be implemented, with new deadlines being dished out every month to a credulous media. And with the turf battle between regulatory authorities far from resolved, 'health portability' seems a far-fetched dream indeed.

Link: Original Article

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