To

CEOs of allGeneral and Standalone Health Insurance Companies

Re: ModifiedGuidelines on Product filing in Health Insurance Business-Norms onProportionate Deductions

1.  Reference is invited to the provisionsof Clause (4) of Chapter II of Guidelines on Product filing in Health InsuranceBusiness (Ref: IRDA/HLT/REG/CIR/150/07/2016) dated 29^th July, 2016(the guidelines) specifying norms on designing of health insurance products.

2.  In addition to the norms specified inclause (4) of Chapter II of the guidelines, the following additional norms arespecified.

3.  Where as part of product designinsurers propose proportionate deduction of the ‘associated medical expenses’when a policyholder chooses a higher room category than the category that iseligible as per terms and conditions of the policy, insurers shall define ‘associatemedical expenses’ in the terms and conditions of policy contract.

4.  The following expenses are not allowedto be part of the definition of ‘associate medical expenses’.

a.   Cost of pharmacy and consumables;

b.  Cost of implants and medical devices

c.   Cost of diagnostics

5.  Insurers shall not recover anyexpenses towards proportionate deductions other than the defined ‘associatemedical expenses’ while processing claims.

6.  Insurers shall ensure thatproportionate deductions are not applied in respect of the hospitals which donot follow differential billing or for those expenses in respect of whichdifferential billing is not adopted based on the room category. This shall beclearly specified in the policy terms and conditions.

7.  Insurers are not permitted to applyproportionate deduction for ‘ICU charges’ as different categories of ICUare not there.

8.  The provisions of these guidelinesshall be applicable to the Health Insurance products filed as per Guidelines onProduct Filing in Health Insurance Business on or after 01^st October,2020. All policy contracts of the existing health insurance products that arenot in compliance with these guidelines shall be modified as and when they aredue for renewal from 01^st April, 2021 onwards.

9.  Insurer shall modify the policywordings of the existing health insurance products without any change in UIN tocomply with these guidelines.

10.This has the approval of the competentauthority.

(D V S Ramesh)

General Manager (Health)