Regulation, Portability, Fraud Control and the Indian Health Market
What the domain tests
The regulatory frame - licensing, product design standards, policyholder protection, portability - alongside fraud typologies and the structure of India's health insurance market.
Core rules
- The IRDAI (Health Insurance) Regulations, 2016 govern product design, underwriting, claims and portability; the TPA Regulations, 2016 license and control third-party administrators; the Protection of Policyholders' Interests Regulations, 2017 cover disclosure, grievance redressal and timelines.
- Mandatory features of indemnity products: lifelong renewability, a moratorium after continuous coverage beyond which a claim cannot be contested except for proven fraud or a stated permanent exclusion, a defined pre-existing disease waiting period, AYUSH treatment cover, and no maximum entry age.
- Portability lets a policyholder move to another insurer retaining waiting-period credit and, where the plan is comparable, accumulated bonus rights. Migration moves the same person to another product of the same insurer. A break in cover beyond the permitted gap destroys the credit.
- Standardised products (Arogya Sanjeevani, Saral Suraksha Bima, cancer-care plans) exist to make comparison meaningful.
- Fraud typologies: provider-side upcoding, phantom billing, unnecessary admissions and unbundling; insured-side non-disclosure, impersonation and fabricated bills; and collusive fraud. Controls include pre-authorisation, network agreements, data analytics, audits and information sharing.
- Market: private general insurers, standalone health insurers, public sector insurers, life insurers writing health and benefit riders, plus government schemes such as Ayushman Bharat PM-JAY.
Worked example
A member completes two years of cover with insurer A, holding ₹6,00,000 sum insured and cumulative bonus of ₹1,20,000. She ports to insurer B, whose product has a three-year pre-existing disease waiting period. Disclosing the same conditions, B gives credit for two years, so only one year of waiting remains. If she allows the policy to lapse beyond the permitted gap before applying, the credit is lost and the three-year clock restarts.
Traps that cost marks
- Assuming portability guarantees the same premium; only credit is ported.
- Assuming a lapsed policy keeps moratorium credit.