Health Insurance to See Major Changes
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27 November 2007
By Nandini Goswami
The burgeoning health insurance sector is set to see some far–reaching changes.
Specialised health insurance subsidiaries and allowing agents of one insurance company to sell health products of other general insurance companies are two of the major proposals.
These proposals were mooted by a committee set up to look into the issue of senior citizens and the health insurance sector.
The Insurance Regulatory & Development Authority (IRDA) had, some time back, talked about the formulation of new regulations in health insurance in order to take it forward.
Industry sources told DNA Money that health insurance needs a special focus and it makes sense to spin the segment into a subsidiary.
This subsidiary, the committee felt, will require special skill sets like a separate CEO, dedicated marketing team, in–house third party administrators etc.
While the committee has recommended this for the general insurance sector, it could, in the long run, be applicable to the life insurance sector as well. Life insurers are in the process of unfolding health plans in close competition with the general insurance sector.
It may be recalled that Life Insurance Corporation has already floated a separate business unit for the purpose.
Given that the health insurance sector has the potential to grow from the present Rs 4,000 crore to Rs 20,000 crore in five years, it makes sense to nurture this high growth segment, the committee is said to have pointed out.
In another change, the committee has felt that there should be modifications in the current restrictive agency regulations. The current regulations do not allow any agent of a company to sell products of different companies. A change has to be brought about if health insurance products have to be popularised, it said.