Irdai mandates general insurers to cover mental illness, HIV and PwDs

New Delhi: The Insurance Regulatory and Development Authority of India (Irdai) has made it mandatory for general insurers or stand-alone health insurers to launch health insurance policies that can provide coverage to people with mental illness and those afflicted with HIV/AIDS and disabilities.

In its latest circular, Irdai said all general and stand-alone health insurers who have been issued a Certificate of Registration to transact general and health insurance business should mandatorily launch and offer their respective products immediately.

Around a year back, the regulator had asked health insurers to add mental illnesses to regular health insurance coverage. However, only some have started such offerings.

Rakesh Goyal, director of Probus Insurance Broke, said, “In 2022, Irdai directed all insurance companies to provide coverage for mental illness under their health insurance policies by 31 October. However, reports indicate that the insurers have not made any progress towards implementing this directive, which has prompted the regulator to issue another directive. The new directive, issued in November 2022, asked the insurers to submit their plans for introducing mental health insurance coverage. Insurers have been asked to provide details on the products they plan to offer, the coverage amounts, and the premiums to be charged. Irdai has also instructed insurers to ensure that the mental health coverage offered is comprehensive and includes treatment for a wide range of mental illnesses. The regulator has further directed insurers to establish a dedicated claims team to process mental illness claims and ensure that such claims are not denied on the grounds of exclusions or sub-limits. The failure of insurance companies to comply with the earlier directive highlights the challenges faced by India’s insurance sector in addressing the issue of low coverage for mental illness. With the new directive, the IRDAI hopes to ensure that insurance companies take concrete steps towards offering comprehensive coverage for mental health issues and addressing the growing demand for such coverage in the country.”

Sharad Mathur, MD & CEO, Universal Sompo General Insurance, said, “The circular issued by the Authority supports the inclusion of persons with disabilities, those afflicted with HIV/ AIDS, and those with mental illness. It would encourage providers to evaluate and develop an appropriate product for the vulnerable section of society. We are evaluating to construct of a suitable cover for this special segment. Although the lack of proper data for the purpose of pricing is a challenge but it is not insurmountable. We look forward to serving the need to the best possible extent.”

Hence, the provisions have been incorporated in respective Acts to make such policies available to people. Health insurance policies will now have to cover Persons with Disabilities (PWD), persons who have HIV/AIDS, and those with mental illness. The regulator has asked all general and health insurers to offer specific cover for Persons with Disabilities (PwDs), persons afflicted with HIV/AIDS, and those with mental illness. Insurers may widen the scope of this product, but in no case they can narrow down the scope of the product.

Insurers have also been directed to put in place a board approved underwriting policy that ensures that no proposal from the above-mentioned categories of the population is denied coverage. According to the Irdai circular, insurers may determine the price of the product subject to complying with norms specified in Irdai (Health Insurance) Regulations, 2016. The policy tenure of the product will be for one year and renewable as per laid down regulatory framework.